Appraisal myths debunked
Legally, an appraiser must be state certified to write legitimate appraisal reports for federally-related sales. Also by law, you have the ability to receive a copy of the completed appraisal from your lending agency. Contact The Welter Appraisal Group if you have any questions about the appraisal procedure.
Myth: The value that is ascertained by the appraiser should be the same as the market value.
Fact: It is possible that New Jersey, like most states, validates the idea that the assessed value equates to the market value; however, this is not often the case. Examples include when interior reconstruction has occurred and the assessor does not know about the improvements, or when properties in the vicinity have not been reassessed for an prolonged period.
Myth: Depending on if the appraisal is written for the buyer or the seller, the value of the house will vary.
Fact: There is no personal interest on the part of the appraiser in the result of the appraisal, therefore he will complete his work with impartiality and independence, no matter for whom the appraisal is created.
Myth: Any time market value is established, it should equal the replacement cost of the house.
Fact: The way market value is arrived at is based on what a home buyer would likely pay a willing seller for a house without being under influence from any outside group to buy or sell. The dollar amount demanded to reconstruct a house is what forms the replacement cost.
Myth: There are specific methods that real estate appraisers use to show the value of a house, like the price per square foot.
Fact: There are many varied formulae that an appraiser will use to make a detailed analysis of every factor in consideration of the house, such as the size, location, condition, how close it is to specific facilities and the opinion of value of recently sold comparable houses.
Myth: In a robust economy - when the prices of properties in a given neighborhood are found to be rising by a particular percentage - the prices of individual properties in the vicinity can be expected to increase by that same percentage.
Fact: All appreciation of value is on a case-by-case basis, determined by information on relevant considerations and the data of comparable houses. This is true in strong economic times as well as poor.
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Myth: The home's outside is determinate of the actual value of the home; there is no need to do an interior inspection.
Fact: There are a multitude of different variables that show property value; these factors include location, condition, improvements, amenities, and market trends. Obviously, none of these things can be found simply by viewing the home from the exterior.
Myth: Because consumers fund appraisals when applying for loans to purchase or refinance real estate, they own their appraisal.
Fact: Unless a lending agency releases its interest in the report, it is legally owned by the lending company that purchased the appraisal. However, consumers must be supplied with a copy of the document upon written request, under the Equal Credit Opportunity Act.
Myth: Home buyers need not worry about what is in their document so long as it meets the requirements of their lending institution.
Fact: A home buyer should definitely look through their appraisal; there might be some questions or some concerns with the accuracy of the report that should be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the report makes a near perfect 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 area.
Myth: There is no reason to hire an appraiser unless you are trying to get an estimate of the price of a home during a sales transaction involving a lender.
Fact: Appraisers can have many different qualifications and designations which allow them to perform a lot of different services including - but 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 completely different than a home inspection. The task of the appraiser is to come to an opinion of value in the appraisal process and through writing the report. House inspectors will write a report that will explain the condition of the home and its major components and possible damage.