Appraisal myths debunked
Legally, an appraiser needs to be state certified to create legitimate appraisal reports for federally-related purchase. Also by law, you have the right to receive a copy of the finished report from your lender. Contact our professional staff if you have any concerns about the appraisal process.
Myth: Assessed value should always be the same as to market value.
Fact: It is possible that New Jersey, like most states, validates the suggestion that the assessed value equals the market value; however, this is sometimes the exception rather than the rule. Interior reconstruction that the assessor is unaware of and a lack of reassessment on nearby houses are exact examples of why there might be a differential in price.
Myth: Depending on whether the appraisal is written for the buyer or the seller, the value of the house will vary.
Fact: The appraiser has no vested interest in the result of the appraisal and should conduct his job with independence, objectivity and impartiality - no matter for whom the appraisal is written.
Myth: Market value should be the same as replacement cost.
Fact: Without any suggestion from any different parties to purchase or sell, market value is what a willing buyer would pay a willing seller for a specific property. Replacement cost is the dollar amount necessary to reconstruct a home in-kind.
Myth: There are specific ways that appraisers use to determine the opinion of value of a house, like the price per square foot.
Fact: An appraisal report is an assertion of data concluded from the house's size, location, proximity to some facilities, the condition of the home and the cost of recent comparable sales. You can rely on The Welter Appraisal Group's appraisers to be honest in assessing this information.
Myth: In a robust economy - when the sales prices of homes in a given county are reported to be appreciating by a particular percentage - the values of individual houses in the proximity can be expected to rise by that same percentage.
Fact: All increase of price is on an individual basis, found by data on relevant considerations and the data of comparable houses. It doesn't matter if the economy is doing well or declining.
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Myth: The home's exterior is determinate of the actual price of the house; it is unnecessary to do an interior appraisal.
Fact: There are a multitude of different factors that determine the value of a house; these factors include location, condition, improvements, amenities, and market trends. There's no possible way to get all of this information from just inspecting the house from the exterior.
Myth: Since you're the one coughing up the cash for the appraisal report when applying for the loan to buy or refinance real estate, you own the provided appraisal.
Fact: Unless a lending agency releases its vestment in the appraisal report, it is legally owned by the lending agency that ordered the appraisal. However, consumers have to be provided with a copy of the document upon written request, under the Equal Credit Opportunity Act.
Myth: There's no point for home buyers to even concern themselves with what the report contains so long as their lending agency is satisfied.
Fact: A consumer should definitely inspect their appraisal report; there may be some questions or some worries with the accuracy of the inspection that should be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the appraisal makes a near perfect record for future reference, filled with useful and often-revealing information - 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: Appraisals are ordered only to assess real estate property values in property sales involving mortgage-lending transactions.
Fact: Appraisers can have many different qualifications and designations which allow them to provide a series of different services including - but certainly not limited to - advice on estate planning, tax assessment, zoning, dispute resolution in many different legal situations and cost analysis.
Myth: You don't have to get an appraisal if you get a home inspection.
Fact: A home inspection has a completely different purpose than an appraisal report. An appraiser finds an opinion of value in the appraisal process and resulting appraisal report. The job of a home inspector is to approximate the condition of the property and its major components, then create a report on their findings.