Common myths about appraising

By law, an appraiser is enforced to be state-licensed to perform appraisals for federally-related transactions. The law allows you to get a copy of your completed report from your lending agency after it has been produced. Contact us if you have any questions about the appraisal process.

Myth: Market value needs to be equivocal to the assessed value of the property.

Fact: While most states back the idea that assessed value is equal to estimated market value, this generally is not the case. At times when interior remodeling has occurred and the assessor is unaware of the improvement or properties in the Houston have not been reassessed for a good length of time, it may vary wildly.

Myth: Depending on whether the appraisal is drawn up for the buyer or the seller, the value of the home will vary.

Fact: The appraiser has no vested 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 provided.

Myth: The replacement cost of the property should be is on par with the market value.

Fact: Market value is found by what a willing buyer would be interested in paying a willing seller for a specific property, with neither being under duress to buy or sell. The dollar amount necessary to reconstruct a home is what forms the replacement cost.

Myth: There are specific methods that appraisers use to show the cost of a house, like the price per square foot.

Fact: An appraisal report is a collection of information 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 Paradigm Appraisal Group, Inc's appraisers to be honest in assessing this data.

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

Fact: Worth appreciation of a certain home has to be concluded on an individualized basis, factoring in information on comparable homes and other relevant elements. It doesn't matter if the economy is doing well or declining.

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Myth: Just seeing what the home looks like on the outside gives an excellent idea of its cost.

Fact: House value is determined by a number of variables, including area, condition, improvements, amenities, and market trends. An external inspection obviously can't provide all of the information necessary.

Myth: Since you're the one coughing up the cash for the appraisal report when applying for the loan to purchase or refinance your home, you own the ordered appraisal report.

Fact: The report is, in fact, legally owned by the lending agency - unless the lender "releases its interest" in the appraisal. By the Equal Credit Opportunity Act, any consumer demanding a copy of the appraisal report must be given it by their lending company.

Myth: It doesn't concern consumers what's in the appraisal report so long as it satisfies the requirements of their lending company.

Fact: A consumer should definitely inspect their document; there might be some questions or some concerns about the accuracy of the report that need to be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the appraisal makes a valuable record for future reference, filled with useful and often-revealing data - including 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: Appraisers are hired only to assess building values in house sales involving mortgage-lending deals.

Fact: Based upon their qualifications and designations, appraisers can and do provide a variety of different 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 order a home inspection.

Fact: A home inspection serves a completely different purpose than an appraisal. The appraiser decides upon an opinion of value in the appraisal process and resulting report. House inspectors will compose a report that will determine the condition of the property and its major components and possible damage.