Appraisal myths & facts

It is mandated by the government that an appraiser is required to be state-licensed to create appraisals for federally-supported real estate transactions in Texas. The law entitles you to receive a copy of your finished appraisal from your lender after it has been provided. Contact us if you have any questions about the appraisal process.

Myth: Assessed value should always be the same as to market value.

Fact: It is probable that Texas, like most states, supports the suggestion that the assessed value equals the market value; however, this is not always true. Sometimes when interior remodeling has occurred and the assessor is unaware of the improvement or other houses in the neighborhood have not been reassessed for quite some time, it may vary wildly.

Myth: The value of a property will vary depending upon whether the appraisal is produced for the buyer or the seller.

Fact: The appraiser has no personal interest in the outcome of the report and should render his task with independence, objectivity and impartiality - no matter for whom the appraisal is provided.

Myth: Any time market value is found, it should equate to the replacement cost of the home.

Fact: Without any suggestion from any outside parties to buy or sell, market value is what a willing buyer would pay an interested seller for a specific property. The dollar amount necessary to reconstruct a house is what forms the replacement cost.

Myth: There are certain methods that real estate appraisers use to find the value of a house, like the price per square foot.

Fact: Appraisers complete a comprehensive analysis of all factors pertaining to the cost of a home, including its location, condition, size, proximity to facilities and recent sale prices of comparable properties.

Myth: In a strong economy - when the sales prices of houses in a given region are found to be appreciating by a particular percentage - the prices of individual properties in the vicinity can be expected to rise by that same percentage.

Fact: Any price at which an appraiser concludes in regards to a specific property is always personalized, based on certain factors found from the information of comparable properties and other considerations within the home itself. It makes no difference if the economy is powerful or terrible.

Myth: Just examining what the property looks like on the outside gives an excellent idea of its value.

Fact: There are a number of different factors that determine the value of a home; these factors include location, condition, improvements, amenities, and market trends. There's no real way to get all of this information from just looking at the property from the outside.

Myth: Considering that the consumer is the person who provides the money to pay for the appraisal when applying for a loan for any real estate transaction, legally the appraisal is theirs.

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

Myth: Home buyers need not worry about what is in their document so long as it meets the requirements of their lending company.

Fact: It is almost imperative for home buyers to peruse a copy of their appraisal report so that they can double-check the accuracy of the document, in case they need to question its veracity. Remember, this is probably the most expensive and important investment a consumer will ever make. There is a wealth of information contained in an report 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 vicinity.