Myth: Market value will always be the same as the assessed value of the property.
Reality: It is possible that Texas, like most states, supports the common myth that the assessed value equates to the market value; however, this is sometimes the exception rather than the rule.
Interior remodeling that the assessor is unaware of and a lack of reassessment on nearby houses are prime examples of why there might be a differential in price.
Myth: Depending on whether the appraisal is written for the buyer or the seller, the value of the house will vary.
Reality: The appraiser has no vested interest in the result of the appraisal report and should complete his task with independence, objectivity and impartiality - no matter for whom the appraisal is conducted.
Myth: Market value will mirror replacement cost.
Reality: Market value is based on what a willing buyer would likely pay a willing seller for a certain property, with neither being under pressure to buy or sell.
If the house were reconstructed, the dollar amount necessary to do so would form the replacement cost.
Myth: Appraisers use a formula, like a specific price per square foot, to arrive at the value of a home.
Reality: Appraisers complete a comprehensive analysis of all factors in consideration to the value of a house, including its location, condition, size, proximity to facilities and recent values of comparable properties.
Myth: In a strong economy - when the values of homes in a given area are found to be appreciating by a certain percentage - the prices of individual houses in the vicinity can be expected to appreciate by that same percentage.
Reality: The appreciation of a certain house is always determined on an individualized basis, factoring in data on comparable homes and other relevant elements.
It doesn't matter if the economy is doing well or declining.
Myth: You can often tell what a home is worth simply by looking at the outside.
Reality: Property value is determined by a number of variables, including area, condition, improvements, amenities, and market trends.
There's no real way to get all of this data from simply viewing the property from the outside.
Myth: Because consumers pay for appraisals when applying for loans to buy or refinance their property, they legally own their appraisal.
Reality: Legally, the appraisal is owned by the lending company unless the lender releases their interest in the appraisal.
However, consumers must be given a copy of the appraisal report upon written request, under the Equal Credit Opportunity Act.
Myth: There's no reason for home buyers to even care about what the report contains so long as their lender is fine with the contents therein.
Reality: Only when home buyers examine a copy of their appraisal report can they ensure 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 report can double as a record for the future, since 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 area.
Myth: There is no reason to hire an appraiser unless you are trying to get an assessment of the value of a house during a sales transaction involving a lender.
Reality: Based upon their qualifications and designations, appraisers can and do provide a variety of services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: You don't need to get an appraisal if you have had a home inspection.
Reality: An appraisal does not serve the same purpose as an inspection report.
The reason behind an appraisal is to conclude upon an opinion of market value during the appraisal process and the completion of the report.
A home inspector assesses the condition of the building and its main components and reports their findings.
