Appraisal myths & facts

It is enforced by the government that a real estate appraiser needs to be state-licensed to produce appraisals for federally-related home purchases in Texas. You also have the right to acquire a copy of the completed report from your lending agency. Contact us if you have any concerns about the appraisal process.

Myth: Assessed value will always be the same as to market value.

Fact: It is probable that Texas, like most states, validates the suggestion that the assessed value equals the market value; however, this is not always true. Interior reconstruction that the assessor is unaware of and a lack of reassessment on nearby properties are prime examples of why this occurs.

Myth: Depending on whether the appraisal is ordered for the buyer or the seller, the opinion of value of the property will vary.

Fact: The price of the property does not affect the salary of the appraiser; due to this, the appraiser has no pressured interest in the cost of the property. What this means is he will render services with impartiality and independence regardless for whom the appraisal is conducted.

Myth: Any time market value is found, it should equate to the replacement cost of the home.

Fact: Without any influence from any external parties to purchase or sell, market value is what a willing buyer would pay a willing seller for a particular house. The replacement cost is the dollar amount required to reconstruct a house in-kind.

Myth: Specific formulae, like the price per square foot of the property, are the ways appraisers use to come to the worth of a house.

Fact: Appraisers make a detailed analysis of all factors in consideration to the cost of a home, including its location, condition, size, proximity to facilities and recent opinion of value of comparable houses.

Myth: In a strong economy - when the values of homes in a given county are reported to be rising by a certain percentage - the values of individual homes in the vicinity can be expected to rise by that same percentage.

Fact: Any worth at which an appraiser concludes concerning a particular property is always personalized, based on certain factors found from the information of comparable houses and other considerations within the property itself. This is true in good economic times as well as bad.

Myth: You can commonly see what a home is worth simply by looking at the exterior.

Fact: To determine an accurate worth beyond all doubt, an appraiser must assess the home on a variety of factors based on location, condition, improvements, amenities, and market trends. Obviously, none of these variables can be derived simply by inspecting the house from the outside.

Myth: Since you're the one funding for the appraisal when applying for the loan to purchase or refinance real estate, you own the ordered appraisal report.

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

Myth: It doesn't matter to consumers what's in the appraisal so long as it meets the necessities of their lending company.

Fact: Only if consumers examine a copy of their appraisal report can they ensure its accuracy and possibly need to question the result. Remember, this is probably the most expensive and important investment a consumer will ever make. There is a wealth of information stored in an report that will probably be useful to the consumer in the future, such as 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 region.