profile picture

English French Spanish

Appraisal myths & facts

It is enforced by law that an appraiser is required to be state-licensed to perform appraisals for federally-related home sales in Texas. Also by law, you are entitled to demand a copy of the finished report from your lender. Contact our professional staff if you have any questions about the appraisal process.

Myth: The value that is ascertained by the appraiser should be exactly the same as the market value.

Fact: While most states back the suggestion that assessed value is the same as estimated market value, this generally is not the case. At times when interior remodeling has occurred and the assessor is unaware of the improvement or properties in the Pearland have not been reassessed for quite some time, it may vary wildly.

Myth: The buyer or the seller sometimes may have impact in the cost of the property depending upon for whom the appraiser is working.

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

Myth: The replacement cost of the home should be is on par with the market value.

Fact: Market value is derived from what a willing buyer would likely pay a willing seller for a particular house, with neither being under pressure to buy or sell. If the property were reconstructed, the dollar amount required to do so would be the replacement cost.

Myth: Appraisers use a formula, such as a specific price per square foot, to figure out the cost of a house.

Fact: Appraisers complete a full analysis of all factors pertaining to the cost of a home, including its location, condition, size, proximity to facilities and recent opinion of value of comparable properties.

Myth: As homes appreciate by a certain percentage - in a strong economy - the properties nearby are figured to increase by the same amount.

Fact: All increase of value is on a case-by-case basis, determined by information on relevant conditions and the data of comparable homes. It doesn't matter if the economy is doing well or declining.

Have other questions about appraisers, appraising or real estate in Brazoria County or Pearland, TX?

Contact our professional staff

Myth: Just looking at what the home looks like on its exterior gives an idea of its value.

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

Myth: Because consumers pay for appraisals when applying for loans to purchase or refinance their property, they legally own their appraisal.

Fact: The report is, in fact, legally owned by the lender - unless the lender "relinquishes its interest" in the document. However, home buyers have to be supplied with a copy of the report upon written request, due to the Equal Credit Opportunity Act.

Myth: There's no point for home buyers to even concern themselves with what the report contains so long as their lending institution is fine with the contents therein.

Fact: A consumer should definitely look through their appraisal; there might be some questions or some worries about the accuracy of the appraisal that need to be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the appraisal report makes a valuable record for future reference, filled with useful and often-revealing data - including, but 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 proximity.

Myth: There is no reason to order an appraisal unless you are trying to get an assessment of the price of a house during a sales transaction involving a lending agency.

Fact: Hiring an appraiser can fulfill a variety of wants depending on the designations and certifications of the appraiser involved; appraisers can provide a variety of different services, including benefit/cost analysis, tax assessment, legal dispute resolution, and even estate planning.

Myth: A property inspection serves the same purpose as an appraisal.

Fact: An appraisal does not serve the same purpose as an inspection. The function of an appraisal report is to arrive at an opinion of fair market value during the appraisal process and the production of the report. The point of a home inspector is to determine the condition of the home and its major components, then produce a report on their inspection.