Appraisal myths & facts

It is mandated by the government that an appraiser needs to be state-licensed to write appraisal reports for federally-supported property sales in Texas. Also by law, you have the right to request a copy of the completed report from your lender. Contact us if you have any questions about the appraisal procedure.

Myth: Assessed value should equate to market value.

Fact: This is not often the case; most states do support the idea that the assessed value is the same as market value, but not always. Examples include when interior reconstruction has happened and the assessor does not know about the improvements, or when homes in the vicinity have not been reassessed for an prolonged time.

Myth: The appraised value of a house will be different depending upon whether the appraisal is produced for the buyer or the seller.

Fact: The appraised value of the home does not affect the pay of the appraiser; because of this, the appraiser has no vested interest in the opinion of value of the house. This means that he will conduct business with impartiality and independence regardless for whom the appraisal is created.

Myth: Market value will equal replacement cost.

Fact: Without any suggestion from any outside parties to purchase or sell, market value is what a willing buyer would pay a willing seller for a particular property. If the property were rebuilt, the dollar amount needed to do so would set the replacement cost.

Myth: Appraisers use a calculation, like a specific price per square foot, to come to the value of a house.

Fact: An appraisal is a collection of data concluded from the home's size, location, proximity to some facilities, the condition of the home and the value of recent comparable sales. You can depend on PAYNE Appraisal, LLC's appraisers to be forthright in assessing this information.

Myth: When the economy is on the rise and the worth of properties are reported to be rising by a certain percentage, the other homes in the neighborhood can be expected to increase based on that same percentage.

Fact: Any worth at which an appraiser concludes concerning a specific house is always personalized, based on certain factors concluded from the data of comparable houses and other specifications within the property itself. It makes no difference whether the economy is strong or poor.

Myth: The home's exterior is determinate of the actual worth of the property; it is unnecessary to do an interior inspection.

Fact: There are a multitude of different variables that show property value; these factors include area, condition, improvements, amenities, and market trends. Obviously, none of these variables can be found just by examining the home from the exterior.

Myth: Because the consumer is the person who puts up the funding to pay for the appraisal when applying for a loan for any real estate transaction, legally the appraisal is theirs.

Fact: The appraisal is, in fact, legally owned by the lending agency - unless the lender "relinquishes its interest" in the report. Consumers have to be supplied with a version of the appraisal report upon written request because of the Equal Credit Opportunity Act.

Myth: It doesn't matter to consumers what's in the report so long as it meets the requirements of their lender.

Fact: A consumer should definitely read through their appraisal; there could be some questions or some worries with the accuracy of the analysis that should be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. There is a great deal of information stored 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.