Myth: The value that is ascertained by the appraiser is required to be equivalent to the market value.
Reality: It is possible that Texas, like most states, validates the common myth that the assessed value equals the market value; however, this is not always true.
Interior reconstruction that the assessor has not investigated and a dearth of reassessment on nearby homes are excellent examples of why this occurs.
Myth: Depending on if the appraisal is ordered for the buyer or the seller, the opinion of value of the home will vary.
Reality: There is no real interest on the part of the appraiser in the result of the analysis, therefore he will conduct his work with impartiality and independence, regardless of for whom the appraisal is written.
Myth: Any time market value is calculated, it should equal the replacement cost of the house.
Reality: Market value is found by what a willing buyer would likely pay a willing seller for a particular home, with neither being under undue influence to buy or sell.
If the house were rebuilt, the dollar amount needed to do so would form the replacement cost.
Myth: Appraisers use a formula, like a specific price per square foot, to arrive at the value of a home.
Reality: Appraisers complete an exhaustive analysis of all factors pertaining to the value of a home, including its location, condition, size, proximity to facilities and recent sale prices of comparable homes.
Myth: As properties appreciate by a certain percentage - in a strong economic state - the homes in proximity are expected to increase by the same amount.
Reality: All increase of value is on a case-by-case basis, concluded by data on relevant conditions and the data of comparable houses.
It makes no difference whether the economy is strong or on the decline.
Myth: You can generally tell what a house is worth simply by looking at the outside.
Reality: Property value is determined by a multitude of factors, including - but not limited to - area, condition, improvements, amenities, and market trends.
Obviously, none of these variables can be found simply by viewing the home from the outside.
Myth: Since the consumer is the one who puts up the funding to pay for the appraisal report when applying for a loan for any real estate transaction, by law the appraisal report is theirs.
Reality: Legally, the report is owned by the lender unless the lender releases their interest in the appraisal.
Due the Equal Credit Opportunity Act, any consumer asking for a copy of the document must be given it by their lending agency.
Myth: Home buyers need not care about what is in their appraisal report so long as it satisfies the necessities of their lending institution.
Reality: A consumer should definitely look through their report; there could be some questions or some worries about the accuracy of the analysis that must be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make.
Also, the appraisal report makes a near perfect record for future reference, comprised of helpful and often-revealing information - 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: The only reason someone would hire an appraiser is if a home needs its value assessed in a lender-based sales transaction.
Reality: Ordering an appraisal can fulfill a variety of necessities depending on the designations and certifications of the appraiser involved; appraisers can perform a variety of different services, including benefit/cost analysis, tax assessment, legal dispute resolution, and even estate planning.
Myth: A house inspection serves the same purpose as an appraisal.
Reality: Appraisal reports are definitely not the same as a home inspection report.
An appraiser concludes on an opinion of value in the appraisal process and resulting document.
House inspectors will create a report that will determine the condition of the home and its major components and possible damage.