Appraisal myths & facts
Legally, an appraiser needs to be state certified to write legitimate appraisal reports for federally-related transactions. You have the ability to demand a copy of the completed report from your lender. Contact our professional staff if you have any concerns about the appraisal process.
Myth: Market value will always be the same as the assessed value of the property.
Fact: This usually isn't true; most states do support the suggestion that the assessed value is the same as market value, but not always. Examples include when interior reconstruction has occurred and the assessor has not seen the improvements, or when properties in the vicinity have not been reassessed for an prolonged time.
Myth: The buyer or the seller may have leverage in the cost of the house depending upon for whom the appraiser is working.
Fact: The value of the house does not affect the salary of the appraiser; because of this, the appraiser has no personal interest in the cost of the home. This means that he will complete his task with impartiality and objectivity regardless for whom the appraisal is conducted.
Myth: Market value should approximate replacement cost.
Fact: The way market value is derived is based on what a home buyer would be willing to pay a willing seller for a house without being under duress from any outside party to buy or sell. If the home were rebuilt, the dollar amount required to do so would be the replacement cost.
Myth: Certain formulae, such as the price per square foot of the property, are the ways appraisers use to arrive at the cost of a property.
Fact: An appraisal is an amalgamation of data based on the house's size, location, proximity to certain facilities, the condition of the home and the value of recent comparable sales. You can count on The Welter Appraisal Group's staff to be ethical in assessing this data.
Myth: In a powerful economy - when the values of houses in a given region are reported to be appreciating by a particular percentage - the worth of individual houses in the proximity can be expected to rise by that same percentage.
Fact: Worth appreciation of a specific house has to be concluded on an individualized basis, factoring in information on comparable properties and other relevant elements. It doesn't matter if the economy is doing well or declining.
Have other questions about appraisers, appraising or real estate in Monmouth County or Oakhurst, NJ?Contact us
Myth: You can commonly tell what a home is worth simply by looking at the outside.
Fact: Home value is determined by a number of factors, including area, condition, improvements, amenities, and market trends. An outside-only inspection certainly can't provide all of the data necessary.
Myth: Since you're the one providing the money for the appraisal report when applying for your loan to purchase or refinance your home, you own the provided appraisal.
Fact: Legally, the appraisal is owned by the lending agency unless the lender relinquishes their interest in the report. However, home buyers have to be supplied with a copy of the appraisal upon written request, due to the Equal Credit Opportunity Act.
Myth: Consumers need not worry about what is in their report so long as it exceeds the requirements of their lending group.
Fact: Only if home buyers check out a copy of their report can they double-check its accuracy and possibly need to question the result. Remember, this is probably the most expensive and important investment a consumer will ever make. There is a wealth of data contained in an appraisal that can 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 proximity.
Myth: The only reason someone would order an appraisal is if a house needs its cost estimated in a lender-based sales transaction.
Fact: Depending upon their qualifications and designations, appraisers can and often do provide a variety of different services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: An appraisal is the same as a home inspection.
Fact: An appraisal report does not fulfill the same purpose as an inspection. The job of the appraiser is to conclude an opinion of value in the appraisal process and through creating the report. House inspectors will write a report that will determine the condition of the house and its major components and possible damage.