Appraisal myths & facts

Legally, a real estate appraiser must be state certified to perform substantiated appraisal reports for federally-supported transactions. The law entitles you to acquire a copy of your finished appraisal report from your lending agency after it has been produced. Contact us if you have any questions about the appraisal procedure.

Myth: Assessed value should be similar to to market value.

Fact: It is probable that Texas, like most states, supports the common myth that the assessed value equates to the market value; however, this certainly varies based on state-to-state. Interior reconstruction that the assessor has not investigated and a lack of reassessment on nearby houses are excellent examples of why there might be a differential in price.

Myth: The opinion of value of a house will differ depending upon whether the appraisal is conducted for the buyer or the seller.

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

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

Fact: The way market value is found is based on what a buyer would be willing to pay a willing seller for a house without being under duress from any outside party to purchase or sell. If the house were reconstructed, the dollar amount needed to do so would be the replacement cost.

Myth: There are certain methods that real estate appraisers use to find the opinion of value of a property, such as the price per square foot.

Fact: An appraisal report is a collection of data concluded from the property's size, location, proximity to certain facilities, the condition of the property and the cost of recent comparable sales. You can depend on Hall Appraisers, Inc.'s appraisers to be ethical in assessing this data.

Myth: As properties appreciate by a certain percentage - in a strong economy - the houses nearby are figured to increase by the same amount.

Fact: Any price at which an appraiser arrives concerning a specific property is always personalized, based on certain factors derived from the data of comparable houses and other specifications within the home itself. This is true in good economic times as well as bad.

Myth: You can often see what a property is worth simply by looking at the outside.

Fact: Property value is determined by a number of variables, including area, condition, improvements, amenities, and market trends. An outside-only inspection definitely can't provide all of the information necessary.

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

Fact: The appraisal is, in fact, legally owned by the lender - unless the lender "releases its interest" in the appraisal. Home buyers must be given a copy of the report upon written request as per the Equal Credit Opportunity Act.

Myth: Home buyers need not be concerned with what is in their report so long as it exceeds the needs of their lending group.

Fact: A home buyer should definitely inspect their document; there may be some questions or some worries about the accuracy of the analysis that must be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. There is a great deal of data contained in an appraisal that should 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 region.