Appraisal myths & facts

Legally, a real estate appraiser needs to be state certified to produce legitimate appraisal reports for federally-related sales. Also by law, you have the right to demand a copy of the finished report from your lending agency. Contact us if you have any concerns about the appraisal process.

Myth: Assessed value generally will be similar to to market value.

Fact: While most states back the idea that assessed value equates estimated market value, this commonly is not the case. Generally when interior remodeling has occurred and the assessor is unaware of the improvement or other houses in the Pearland have not been reassessed for quite some time, it may vary wildly.

Myth: The opinion of value of a home will be different depending upon if the appraisal is produced for the buyer or the seller.

Fact: There is no personal interest on the part of the appraiser in the outcome of the appraisal report, therefore he will complete his work with impartiality and independence, despite for whom the appraisal is ordered.

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

Fact: The way market value is found is based on what a home buyer would likely pay a willing seller for a home without being under pressure from any outside group to purchase or sell. If the home were rebuilt, the dollar amount needed to do so would make up the replacement cost.

Myth: There are specific ways that appraisers use to show the value of a home, such as the price per square foot.

Fact: There are many different processes that an appraiser will use to make a full analysis of every factor pertaining to the home, such as the size, location, condition, how close it is to specific facilities and the worth of recently sold comparable properties.

Myth: In a powerful economy - when the costs of homes in a given county are reported to be appreciating by a particular percentage - the values of individual houses in the vicinity can be expected to increase by that same percentage.

Fact: Cost increase of a certain property is always determined on a case-by-case basis, factoring in data on comparable properties and other relevant considerations. It makes no difference if the economy is powerful or terrible.

Myth: The house's exterior is determinate of the actual worth of the home; there is no need to do an interior inspection.

Fact: There are a multitude of different variables that determine the value of a house; these factors include location, condition, improvements, amenities, and market trends. There's no possible way to get all of this data from simply looking at the house from the outside.

Myth: Because consumers pay for the appraisal when applying for loans to buy or refinance their home, they legally own their appraisal.

Fact: Legally, the document is owned by the lender unless the lender relinquishes their interest in the report. However, consumers have to be provided with a copy of the document upon written request, under the Equal Credit Opportunity Act.

Myth: There's no need for consumers to even concern themselves with what the appraisal contains so long as their lending institution is fine with the contents therein.

Fact: A home buyer should definitely inspect their appraisal; there might be some questions or some concerns with the accuracy of the inspection that need to be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. There is an incredible amount of information stored in an appraisal that can 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 region.