Myth: Market value will be similar to the assessed value of the property.
Reality: It could be that Texas, like most states, validates the suggestion that the assessed value is no different from the market value; however, this is not often the case. Interior remodeling that the assessor has not investigated and a dearth of reassessment on nearby properties are prime examples of why this occurs.
Myth: The buyer or the seller sometimes may have an influence in the value of the home depending upon for whom the appraiser is working.
Reality: 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, regardless of for whom the appraisal is created.
Myth: Any time market value is calculated, it should be the same as the replacement cost of the property.
Reality: The way market value is found is based on what a buyer would be willing to pay a willing seller for a property without being under duress from any outside group to buy or sell. The replacement cost is the dollar amount necessary to rebuild a property in-kind.
Myth: Certain formulae, such as the price per square foot, are the methods appraisers use to ascertain the value of a home.
Reality: There are many differing processes that an appraiser will use to make a detailed analysis of every factor pertaining to the home, such as the size, location, condition, how close it is to undesirable facilities and the sales prices of recently sold comparable houses.
Myth: As homes increase in value by a specific percentage - in a strong economic state - the properties nearby are expected to increase by the same amount.
Reality: All increase of value is on a one-on-one basis, determined by data on relevant conditions and the data of comparable properties. This is true in good economic times as well as poor.
Myth: The property's outside is determinate of the expected price of the house; it is unnecessary to do an interior inspection.
Reality: To find an accurate value beyond all doubt, an appraiser must examine the house on a variety of factors based on area, condition, improvements, amenities, and market trends. There's no possible way to get all of this information from simply looking at the property from the exterior.
Myth: Since you're the one funding for the appraisal report when applying for the loan to buy or refinance your home, you own the provided appraisal.
Reality: Legally, the appraisal is owned by the lending company unless the lender releases their interest in the document. Under the Equal Credit Opportunity Act, any home buyer demanding a copy of the appraisal report must be given it by their lending company.
Myth: It doesn't matter to consumers what's in the report so long as it meets the necessities of their lending company.
Reality: It is almost imperative for home buyers to peruse a copy of their appraisal so that they can double-check 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 an incredible amount of data contained in an appraisal report that will probably be useful to the consumer 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: There is no reason to order an appraisal unless you are trying to get an assessment of the value of a house during a sales transaction involving a lender.
Reality: Ordering an appraisal can fulfill a variety of requirements depending on the designations and certifications of the appraiser involved; appraisers can provide a great deal of different services, including benefit/cost analysis, tax assessment, legal dispute resolution, and even estate planning.
Myth: A home inspection serves the same purpose as an appraisal.
Reality: A home inspection report serves a completely different purpose than an appraisal. The appraiser concludes on an opinion of value in the appraisal process and resulting document. A home inspector determines the condition of the house and its major components and reports their findings.
