Appraisal myths debunked
By law, an appraiser must be state-licensed to produce appraisals for federally-related sales. Also by law, you have the ability to request a copy of the finished report from your lending agency. Contact The Welter Appraisal Group if you have any questions about the appraisal procedure.
Myth: Market value should be equivocal to the assessed value of the property.
Fact: It might be that New Jersey, like most states, supports the idea that the assessed value equals the market value; however, this is not always true. Examples include when interior reconstruction has occurred and the assessor has not seen the improvements, or when houses in the area have not been reassessed for an extended time.
Myth: The value of a house will change depending upon if the appraisal is produced for the buyer or the seller.
Fact: There is no personal interest on the part of the appraiser in the outcome of the report, therefore he will conduct his work with impartiality and independence, no matter for whom the appraisal is ordered.
Myth: The replacement cost of the home will be is on par with the market value.
Fact: Without any pressure from any external parties to purchase or sell, market value is what a willing buyer would pay a willing seller for a specific home. The replacement cost is the dollar amount needed to reconstruct a house in-kind.
Myth: There are certain ways that appraisers use to find the cost of a home, such as the price per square foot.
Fact: Appraisers make an exhaustive analysis of all factors pertaining to the worth of a home, including its location, condition, size, proximity to facilities and recent opinion of value of comparable houses.
Myth: In a robust economy - when the worth of homes in a given county are found to be appreciating by a certain percentage - the costs of individual houses in the proximity can be expected to increase by that same percentage.
Fact: Any worth at which an appraiser arrives concerning a particular home is always personalized, based on certain factors found from the data of comparable properties and other specifications within the home itself. It doesn't matter if the economy is on the rise or declining.
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Myth: The home's outside is determinate of the actual worth of the home; there is no need to do an interior inspection.
Fact: House value is determined by a multitude of factors, including - but not limited to - location, condition, improvements, amenities, and market trends. There's no possible way to get all of this information from just viewing the property from the outside.
Myth: Because the consumer is the person who puts up the money to pay for the appraisal report when applying for a loan for any real estate transaction, by law the appraisal belongs to them.
Fact: Legally, the appraisal is owned by the lender unless the lender relinquishes their interest in the report. Home buyers must be supplied with a version of the document upon written request because of the Equal Credit Opportunity Act.
Myth: Consumers need not worry about what is in their appraisal so long as it meets the requirements of their lending company.
Fact: Only if consumers read a copy of their appraisal report can they verify its accuracy and possibly need to question the result. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the appraisal report makes an excellent record for future reference, comprised of 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 vicinity.
Myth: The only reason someone would order an appraisal is if a house needs its cost assessed in a lender sales transaction.
Fact: Depending upon their qualifications and designations, appraisers can and often do provide a variety of services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: A home inspection serves the same purpose as an appraisal.
Fact: An appraisal does not fulfill the same purpose as an inspection report. The purpose of the appraiser is to conclude an opinion of value in the appraisal process and through writing the report. A home inspector assesses the condition of the property and its major components and reports these findings.