Common myths about appraising
It is mandated by law that an appraiser is required to be state-licensed to write appraisals for federally-supported real estate purchases in Texas. The law gives you the right to receive a copy of your finished report from your lending agency after it has been provided. Contact our professional staff if you have any concerns about the appraisal process.
Myth: Market value needs to be equivocal to the assessed value of the property.
Fact: While most states uphold the concept that assessed value is equal to estimated market value, this usually is not the case. Examples include when interior remodeling has happened and the assessor has not seen the improvements, or when houses in the area have not been reassessed for an extended period of time.
Myth: Depending on if the appraisal is drawn up for the buyer or the seller, the opinion of value of the home will vary.
Fact: The appraiser has no personal interest in the result of the report and should render his job with independence, objectivity and impartiality - no matter for whom the appraisal is conducted.
Myth: Market value will approximate replacement cost.
Fact: Market value is derived from what a willing buyer would be interested in paying a willing seller for a specific home, with neither being under duress to buy or sell. The dollar amount necessary to rebuild a house is what constitutes the replacement cost.
Myth: Certain methods, such as the price per square foot, are the ways appraisers use to come to the price of a home.
Fact: Appraisers complete an exhaustive analysis of all factors pertaining to the value of a house, including its location, condition, size, proximity to facilities and recent worth of comparable houses.
Myth: As homes appreciate by a certain percentage - in a strong economic state - the houses within the same neighborhood are expected to appreciate by the same amount.
Fact: All increase of value is on an individual basis, determined by information on relevant considerations and the data of comparable houses. It doesn't matter if the economy is on the rise or declining.
Have other questions about appraisers, appraising or real estate in Randall County or Amarillo, TX?Contact Anderson Appraisal, LLC
Myth: You can often find what a home is worth simply by looking at the outside.
Fact: There are a number of different factors that conclude the value of a home; these factors include area, condition, improvements, amenities, and market trends. An outside-only inspection obviously can't provide all of the data required.
Myth: Because consumers pay for appraisals when applying for loans to purchase or refinance their property, they legally own their appraisal report.
Fact: Legally, the appraisal report is owned by the lending agency unless the lender releases their interest in the appraisal. Consumers must be provided with a version of the document through request because of the Equal Credit Opportunity Act.
Myth: It doesn't matter to consumers what's in the appraisal report so long as it satisfies the needs of their lender.
Fact: It is almost imperative for home buyers to peruse a copy of their appraisal report so that they can double-check the accuracy of the report, in case it's required to question its accuracy. Remember, this is probably the most expensive and important investment a consumer will ever make. An appraisal report can serve as a record for the future, as it contains a great deal 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 vicinity.
Myth: The only reason someone would hire an appraiser is if a property needs its price estimated in a lender-based sales transaction.
Fact: Appraisers can have many varied qualifications and designations which allow them to perform a lot of different services including - but certainly not limited to - advice on estate planning, tax assessment, zoning, dispute resolution in many different legal situations and cost analysis.
Myth: An appraisal report is the same as a home inspection.
Fact: An appraisal report does not serve the same purpose as an inspection report. The appraiser forms an opinion of value in the appraisal process and resulting report. The task of a home inspector is to find the condition of the home and its major components, then create a report on these conclusions.