Home Appraisal Myths Busted

Most things to do with buying or selling a home can be pretty stressful, from finding the house of your dreams, to securing the financing, all the way through to closing. But for most transactions, everything, absolutely everything, hinges on the home appraisal. This is probably why so many myths and misconceptions have grown up around the process. We’re here to help you sort the truth from the stories.

Myth #1: Home Appraisals and Home Inspections Are the Same

This couldn’t be further from the truth. The sole purpose of a home appraisal is to determine the value of the home, in that moment, in those market conditions, in the shape that home is currently in. A home inspection, on the other hand, determines the condition of the home, along with any major defects, in the moment when it’s being inspected.

The waters get muddied when buyers are securing FHA or USDA loans, which require an additional loan-specific inspection be performed by the appraiser. This particular kind of inspection is there to ensure that the home meets the loan’s minimum standards, not to determine the overall condition of the home. Always have a home inspection, it’s a much different thing.

Myth #2: Home Appraisers Create Market Values

Although the home appraiser will assign your home a rough value, the work they do is actually based on a thorough study of the current real estate market’s conditions, the condition of the home, the value of each component of the home, the value the neighborhood contributes, and a myriad of other factors, as well as the fact that a buyer was willing to pay the amount of your contract for the home.

So, while any individual home appraiser could be considered to be contributing to market values, they in no way set them. You can think of them more like a reporter, simply telling the story of your home and the things in it, for better or for worse. They see homes every day and understand what a dollar will buy in their particular markets.

Myth #3: If You’ve Had an Assessment, You Don’t Need an Appraisal

While an assessment is a type of valuation of a home for the purposes of determining tax responsibility, they don’t go into the kind of depth an appraisal does. Do you remember the last time someone went onto your property and into your home to perform a tax assessment? Of course not, because they’re simply not that thorough. Tax assessments have to be done quickly due to the sheer number performed at once, so they are often painted with a very broad brush.

Appraisals, on the other hand, can each take several hours, including the time the appraiser is on site examining the home’s interior. This is why when someone believes their assessment to be incorrect, they can challenge it using a home appraisal. The appraisal is simply more accurate. Never use an assessment for sales or purchase purposes, you’ll be sorely disappointed.

Myth #4: The Appraiser Is on the Bank’s Side

An appraiser is a neutral third-party expert who is contracted by banks to determine the value of your home so they can use this figure in making your loan. This doesn’t mean that appraisers are working on behalf of the bank or that they’re simply there to make the numbers work out every time. Sometimes, appraisers come back with very bad news about homes, determining that they absolutely cannot be appraised for the transaction price, or that there’s something about them that means they cannot meet the minimum requirements of a given loan type.


Take a listen to the episode Get to Know Your Home – The Inspection! of my Relax, I Got This Podcast, where my guest and I talk about all things real estate. This episode features Ken Dugan, owner of Pillar to Post, a local DFW home inspection company.


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Robin McCoy is a Texas Realtor with Keller Williams Realty. License #0582766
RobinMcCoyRealty.com | 214.226.3770 | RobinMcCoy@kw.com


The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice. Robin McCoy Realty Group and Living in DFW does not guarantee or warrant the accuracy or completeness of the information or opinions contained herein. Nothing herein should be construed as investment advice. You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. Robin McCoy Realty Group and Living in DFW will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein.


Published by Living In DFW

I guess you can take the girl out of Texas but you can't take Texas out of the girl. I was born here in Dallas and moved away at age 8. After 30 years of moving around the United States, as a child with the family and as an adult without them, I finally found myself back in Dallas. Since I returned in 2001 I have sold furniture for Crate&Barrel and Real Estate with Keller Williams. It is my hope to share with you what I love, question, and find interesting here in DFW.

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