Common myths about appraising
Legally, an appraiser is required to be state certified to perform substantiated appraisal reports for federally-backed sales. The law allows you to get a copy of your completed report from your lender after it has been provided. Contact our professional staff if you have any concerns about the appraisal procedure.
Myth: Market value has to be similar to the assessed value of the property.
Fact: This is not often the case; most states do support the concept that the assessed value is the same as market value, but not always. Examples include when interior remodeling has happened and the assessor is unaware of the improvements, or when properties in the vicinity have not been reassessed for an extended time.
Myth: Depending on whether the appraisal is written for the buyer or the seller, the appraised value of the property will vary.
Fact: There is no real interest on the part of the appraiser in the outcome of the report, therefore he will complete his work with impartiality and independence, regardless for whom the appraisal is ordered.
Myth: The replacement value of the home will be is on par with the market value.
Fact: Without any pressure from any outside parties to purchase or sell, market value is what a willing buyer would pay a willing seller for a specific home. The dollar amount needed to reconstruct a house is what constitutes the replacement cost.
Myth: There are certain ways that real estate appraisers use to show the value of a property, like the price per square foot.
Fact: An appraisal report is a collection of information concluded from the property's size, location, proximity to some facilities, the condition of the house and the price of recent comparable sales. You can count on The Welter Appraisal Group's appraisers to be forthright in assessing this data.
Myth: When the economy is doing well and the value of homes are reported to be increasing by a certain percentage, the other properties in the neighborhood can be expected to appreciate based on that same percentage.
Fact: Any cost at which an appraiser concludes in regards to a certain home is always personalized, based on certain factors pulled from the information of comparable houses and other specifications within the home itself. It makes no difference if the economy is robust or poor.
Have other questions about appraisers, appraising or real estate in Monmouth County or Oakhurst, NJ?Contact our professional staff
Myth: You can commonly see what a property is worth simply by looking at the outside.
Fact: To find an accurate worth beyond all doubt, an appraiser must assess the house on a variety of factors based on location, condition, improvements, amenities, and market trends. As you can see, none of these variables can be derived just by inspecting the house from the exterior.
Myth: Since the consumer is the party who puts up the money to pay for the appraisal when applying for a loan for any real estate transaction, by law the appraisal belongs to them.
Fact: Legally, the document is owned by the lending agency unless the lender releases their interest in the document. However, home buyers have to be provided with a copy of the report upon written request, under the Equal Credit Opportunity Act.
Myth: There's no point for home buyers to even worry about what the report contains so long as their lender is satisfied.
Fact: A home buyer should definitely read through their appraisal; there may be some questions or some worries with the accuracy of the appraisal report 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 information stored in an appraisal that could be useful to the consumer 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 area.
Myth: Appraisers are hired only to estimate real estate property values in property sales involving mortgage-lending deals.
Fact: Appraisers can have many different qualifications and designations which allow them to provide a multitude of different services including - but definitely not limited to - advice on estate planning, tax assessment, zoning, dispute resolution in many different legal situations and cost analysis.
Myth: A home inspection serves the same purpose as an appraisal.
Fact: Appraisal reports are nothing like a home inspection. The purpose of an appraisal is to form an opinion of fair market value during the appraisal process and the production of the appraisal. House inspectors will compose a report that will determine the condition of the property and its major components and possible damage.