Appraisal myths & facts

By law, an appraiser is required to be state-licensed to offer appraisals for federally-related purchases. You have the ability to request a copy of the finished report from your lending agency. Contact Young Appraisal Company, Inc. if you have any questions about the appraisal procedure.

Myth: Assessed value should always equate to market value.

Fact: It is possible that Texas, like most states, validates the idea that the assessed value is no different from the market value; however, this certainly varies based on state-to-state. Sometimes when interior remodeling has occurred and the assessor is not aware of the improvement or other houses in the area have not been reassessed for a good length of time, it may vary wildly.

Myth: Depending on if the appraisal is produced for the buyer or the seller, the value of the home will vary.

Fact: The appraiser has no vested interest in the outcome of the report and should complete services with independence, objectivity and impartiality - no matter for whom the appraisal is conducted.

Myth: Market value will be the same as replacement cost.

Fact: The way market value is arrived at is based on what a home buyer would likely pay a willing seller for a house without being under pressure from any outside party to purchase or sell. If the home were reconstructed, the dollar amount required to do so would set the replacement cost.

Myth: There are specific methods that appraisers use to determine the value of a house, like the price per square foot.

Fact: An appraisal report is an assertion of data based on the house's size, location, proximity to some facilities, the condition of the home and the worth of recent comparable sales. You can count on Young Appraisal Company, Inc.'s staff to be honest in assessing this data.

Myth: As homes increase their worth by a certain percentage - in a strong economy - the houses nearby are expected to increase by the same amount.

Fact: Any value at which an appraiser concludes in regards to a certain house is always individualized, based on certain factors found from the data of comparable houses and other considerations within the property itself. It doesn't matter if the economy is on the rise or declining.

Myth: Just looking at what the property looks like on the outside gives an excellent idea of its cost.

Fact: To find an accurate price beyond all doubt, an appraiser must examine the property on a variety of factors based on area, condition, improvements, amenities, and market trends. An exterior inspection certainly can't provide all of the data necessary.

Myth: Considering that the consumer is the person who puts up the capital to pay for the appraisal report when applying for a loan for any real estate transaction, by law the appraisal report belongs to them.

Fact: The appraisal report is, in fact, legally owned by the lending company - unless the lender "releases its interest" in the document. However, consumers must be supplied with a copy of the appraisal upon written request, through the Equal Credit Opportunity Act.

Myth: It doesn't matter to consumers what's in the report so long as it satisfies the necessities of their lending agency.

Fact: Only if consumers examine a copy of their report can they double-check its accuracy and possibly need to question the result. Remember, this is probably the most expensive and important investment a consumer will ever make. An report can serve as a record for the future, containing an incredible amount of data - including, but certainly not limited to the legal and physical description of the property, square footage measurements, list of comparable properties in the neighborhood, neighborhood description and a narrative of current real-estate activity and/or market trends in the area.