Myth: Assessed value should equate market value.
Reality: It might be that Texas, like most states, supports the idea that the assessed value is the same as the market value; however, this certainly varies based on state-to-state.
Examples include when interior reconstruction has occurred and the assessor is unaware of the improvements, or when properties in the area have not been reassessed for an extended period of time.
Myth: Depending on if the appraisal is drawn up for the buyer or the seller, the appraised value of the home will vary.
Reality: There is no vested 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: Market value should equate to replacement cost.
Reality: Market value is derived from what a willing buyer would be interested in paying a willing seller for a certain property, with neither being under duress to buy or sell.
The dollar amount necessary to rebuild a property is what forms the replacement cost.
Myth: Appraisers use a calculation, like a specific price per square foot, to come to the value of a property.
Reality: There are many numerous formulae that an appraiser will use to make a full investigation of every factor pertaining to the house, such as the size, location, condition, how close it is to undesirable facilities and the values of recently sold comparable homes.
Myth: As homes increase in value by a certain percentage - in a strong economy - the homes around the appreciating properties are figured to increase by the same amount.
Reality: Any value an appraiser reports concerning a specific home is always personalized, based on certain factors concluded from the data of comparable properties and other considerations within the home itself.
This is true in robust economic times as well as bad.
Myth: Just seeing what the home looks like on its exterior gives a good idea of its value.
Reality: Home value is concluded by a number of factors, including area, condition, improvements, amenities, and market trends.
There's no real way to get all of this information from simply examining the house from the outside.
Myth: Since you're the one paying for the appraisal report when applying for the loan to buy or refinance your home, you own the ordered appraisal.
Reality: Unless a lender releases its vestment in the document, it is legally owned by the lending company that purchased the appraisal.
Under the Equal Credit Opportunity Act, any home buyer requesting a copy of the report must be provided with it by their lending agency.
Myth: There's no point for consumers to even worry about what the appraisal report contains so long as their lender is satisfied.
Reality: It is a very good idea for consumers to check over a copy of their appraisal report so that they can verify the accuracy of the document, in case it's required to question its accuracy. Remember, this is probably the most expensive and important investment a consumer will ever make.
An appraisal can double as a record for the future, as it contains an incredible amount of information - including, but certainly 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 area.
Myth: Appraisals are ordered only to assess real estate property values in house sales involving mortgage-lending deals.
Reality: Ordering an appraisal can fulfill a variety of needs depending on the designations and certifications of the appraiser involved; appraisers can provide a multitude of different services, including benefit/cost analysis, tax assessment, legal dispute resolution, and even estate planning.
Myth: An appraisal report is no different than a home inspection.
Reality: An appraisal does not fulfill the same purpose as an inspection report.
The job of the appraiser is to arrive at an opinion of value in the appraisal process and through creating the report.
House inspectors will produce a report that will determine the condition of the property and its major components and possible damage.
