Myth: Assessed value should always be similar to market value.
Reality: It is possible that Texas, like most states, validates the suggestion that the assessed value is the same as the market value; however, this is not often the case.
Examples include when interior reconstruction has occurred and the assessor has not seen the improvements, or when homes in the area have not been reassessed for an extended period of time.
Myth: Depending on if the appraisal is done 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 appraisal, therefore he will complete his work with impartiality and independence, no matter of for whom the appraisal is written.
Myth: Market value will be the same as replacement cost.
Reality: The way market value is arrived at is based on what a buyer would be willing to pay a willing seller for a home without being under pressure from any external group to buy or sell.
If the property were reconstructed, the dollar amount required to do so would be the replacement cost.
Myth: There are certain methods that appraisers use to determine the cost of a home, like the price per square foot.
Reality: There are many differing formulae that an appraiser will use to make a full investigation of every factor in consideration of the house, such as the size, location, condition, how close it is to undesirable facilities and the sales prices of recently sold comparable homes.
Myth: In a strong economy - when the prices of houses in a given region are reported to be increasing by a certain percentage - the prices of individual properties in the area can be expected to rise by that same percentage.
Reality: The appreciation of a certain property has to be concluded on an individualized basis, factoring in information on comparable houses and other relevant elements.
It makes no difference if the economy is robust or bad.
Myth: The house's exterior is determinate of the expected price of the property; there is no need to do an interior inspection.
Reality: Home value is concluded by a multitude of factors, including - but not limited to - area, condition, improvements, amenities, and market trends.
There's no real way to get all of this information from just examining the home from the outside.
Myth: Because consumers fund the appraisal when applying for loans to purchase or refinance their house, they legally own their appraisal.
Reality: Unless a lender releases its vestment in the document, it is legally owned by the lending company that purchased the appraisal.
Due the Equal Credit Opportunity Act, any consumer asking for a copy of the report must be given one by their lender.
Myth: It doesn't matter to consumers what's in the appraisal so long as it satisfies the needs of their lending company.
Reality: Only when home buyers look at a copy of their appraisal can they verify its accuracy and know if they should ask questions. 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 a great deal of data - including, but 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 proximity.
Myth: The only reason someone would order an appraisal is if a house needs its value assessed in a lender sales transaction.
Reality: Appraisers can have many different qualifications and designations which allow them to provide a lot of different services including - but not limited to - advice on estate planning, tax assessment, zoning, dispute resolution in many different legal situations and cost analysis.
Myth: An appraisal is no different than a home inspection.
Reality: A home inspection report serves a completely different purpose than an appraisal report.
The job of the appraiser is to arrive at an opinion of value in the appraisal process and through writing the report.
A home inspector determines the condition of the property and its major components and reports their findings.