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Common myths about appraising

By law, an appraiser is required to be state-licensed to offer appraisals for federally-supported sales. You have the ability to request a copy of the completed appraisal report from your lending agency. Contact Elite Appraisal Services if you have any questions about the appraisal procedure.

Myth: Market value should be equivocal to the assessed value of the property.

Fact: It might be that Texas, like most states, supports the common myth that the assessed value equals the market value; however, this is not often the case. Examples include when interior reconstruction has occurred and the assessor has not seen the improvements, or when properties in the vicinity have not been reassessed for an extended period of time.

Myth: The opinion of value of a house will differ depending upon whether the appraisal is conducted for the buyer or the seller.

Fact: The price of the house does not affect the pay of the appraiser; as such, the appraiser has no pressured interest in the value of the house. What this means is he will provide job with impartiality and objectivity regardless for whom the appraisal is created.

Myth: Market value should equal replacement cost.

Fact: Market value is arrived at through what a willing buyer would be interested in paying a willing seller for a specific house, with neither being under undue influence to buy or sell. If the house were rebuilt, the dollar amount required to do so would be the replacement cost.

Myth: Specific formulae, such as the price per square foot, are the ways appraisers use to determine the worth of a home.

Fact: Appraisers make an exhaustive analysis of all factors pertaining to the value of a property, including its location, condition, size, proximity to facilities and recent worth of comparable houses.

Myth: As houses increase their worth by a certain percentage - in a strong economic state - the homes within the same neighborhood are figured to appreciate by the same amount.

Fact: All appreciation of price is on a one-on-one basis, found by information on relevant elements and the data of comparable properties. It doesn't matter if the economy is on the rise or declining.

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

Fact: To conclude an accurate worth beyond all doubt, an appraiser must inspect the house on a variety of factors based on location, 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 one who puts up the money to pay for the appraisal when applying for a loan for any real estate transaction, by law the appraisal report is theirs.

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

Myth: There's no reason for consumers to even care about what the appraisal report contains so long as their lending company is fine with the contents therein.

Fact: It is almost imperative for consumers to look at a copy of their report so that they can verify the accuracy of the document, in case they need to question its accuracy. Remember, this is probably the most expensive and important investment a consumer will ever make. There is a great deal of data stored in an appraisal that could be useful to the home buyer 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 area.

Myth: Appraisals are ordered only to estimate building values in property sales involving mortgage-lending deals.

Fact: Appraisers can have many different qualifications and designations which allow them to provide a multitude of different services including - but definitely not limited to - advice on estate planning, tax assessment, zoning, dispute resolution in many different legal situations and cost analysis.

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

Fact: A home inspection report serves a completely different purpose than an appraisal. An appraiser concludes on an opinion of value in the appraisal process and resulting report. A home inspector determines the condition of the home and its major components and reports these findings.