Appraisal myths debunked

By law, an appraiser is enforced to be state-licensed to offer appraisals for federally-related sales. The law gives you the right to acquire a copy of your finished appraisal from your lending agency after it has been produced. Contact Sunago Advisory Group, Inc. if you have any questions about the appraisal procedure.

Myth: The value that is assessed by the appraiser is required to be the same as the market value.

Fact: It is possible that Texas, like most states, supports the suggestion that the assessed value is the same as the market value; however, this is sometimes the exception rather than the rule. Sometimes when interior remodeling has occurred and the assessor is not aware of the improvement or other homes in the area have not been reassessed for quite a while, it may vary wildly.

Myth: The buyer or the seller may have impact in the value of the house depending upon for whom the appraiser is working.

Fact: The appraiser has no personal interest in the result of the appraisal and should conduct services with independence, objectivity and impartiality - no matter for whom the appraisal is written.

Myth: Any time market value is established, it should equal the replacement cost of the house.

Fact: Market value is arrived at through what a willing buyer would likely pay a willing seller for a specific property, with neither being under pressure to buy or sell. Replacement value is the dollar amount required to rebuild a property in-kind.

Myth: Appraisers use a formula, such as a certain price per square foot, to arrive at the worth of a house.

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

Myth: When the economy is robust and the value of homes are reported to be increasing by a certain percentage, the other homes in the proximity can be expected to rise based on that same percentage.

Fact: Any price at which an appraiser concludes concerning a specific house is always individualized, based on certain factors found from the information of comparable properties and other considerations within the house itself. This is true in good economic times as well as poor.

Myth: Just looking at what the home looks like on its exterior gives a good idea of its worth.

Fact: To determine an accurate price beyond all doubt, an appraiser must assess the property on a variety of factors based on area, condition, improvements, amenities, and current market trends. There's no possible way to get all of this data from just looking at the property from the exterior.

Myth: Since you're the one funding for the appraisal report when applying for your loan to purchase or refinance real estate, you own the ordered appraisal report.

Fact: The document is, in fact, legally owned by the lender - unless the lender "relinquishes its interest" in the report. However, home buyers have to be provided with a copy of the appraisal report upon written request, under the Equal Credit Opportunity Act.

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

Fact: A consumer should definitely look through their report; there could be some questions or some concerns with the accuracy of the analysis that must be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. There is a wealth of data contained in an appraisal that will probably 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 proximity.