Appraisal myths debunked
It is enforced by law that an appraiser is required to be state-licensed to perform appraisal reports for federally-related property sales in New Jersey. Also by law, you are entitled to receive a copy of the finished report from your lending agency. Contact us if you have any questions about the appraisal process.
Myth: The value that is assessed by the appraiser is required to be exactly the same as the market value.
Fact: While most states support the suggestion that assessed value is equal to estimated market value, this generally is not the case. Examples include when interior reconstruction has happened and the assessor does not know about the improvements, or when houses in the area have not been reassessed for an extended period.
Myth: Depending on if the appraisal is written for the buyer or the seller, the value of the property will vary.
Fact: The value of the property does not affect the payment of the appraiser; because of this, the appraiser has no vested interest in the opinion of value of the home. What this means is he will render job with impartiality and objectivity regardless for whom the appraisal is conducted.
Myth: The replacement value of the property should be is on par with the market value.
Fact: Market value is derived from what a willing buyer would be interested in paying a willing seller for a specific property, with neither being under pressure to buy or sell. The dollar amount needed to reconstruct a property is what shows the replacement cost.
Myth: There are certain methods that real estate appraisers use to find the opinion of value of a property, such as the price per square foot.
Fact: There are many varied processes that an appraiser will use to make a full analysis of every factor pertaining to the house, such as the size, location, condition, how close it is to certain facilities and the worth of recently sold comparable properties.
Myth: In a strong economy - when the worth of houses in a given area are found to be appreciating by a certain percentage - the prices of individual houses in the proximity can be expected to rise by that same percentage.
Fact: Worth appreciation of a specific property must be determined on an individualized basis, factoring in data on comparable houses and other relevant considerations. It makes no difference if the economy is excellent or terrible.
Have other questions about appraisers, appraising or real estate in Monmouth County or Oakhurst, NJ?Contact our professional staff
Myth: You can often find what a home is worth simply by looking at the outside.
Fact: There are a multitude of different variables that determine property value; these factors include location, condition, improvements, amenities, and market trends. As you can see, none of these factors can be derived just by viewing the home from the exterior.
Myth: Because the consumer is the party who provides the capital to pay for the appraisal report when applying for a loan for any real estate transaction, legally the appraisal belongs to them.
Fact: Legally, the report is owned by the lending agency unless the lender relinquishes their interest in the document. By the Equal Credit Opportunity Act, any home buyer requesting a copy of the appraisal report must be given it by their lending agency.
Myth: There's no need for home buyers to even worry about what the appraisal contains so long as their lender is satisfied.
Fact: It is very important for consumers to look at a copy of their appraisal report so that they can verify the accuracy of the document, in case they need to question its veracity. 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, containing helpful 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 vicinity.
Myth: The only reason someone would order an appraisal is if a property needs its value estimated in a lender sales transaction.
Fact: Ordering an appraisal can fulfill a variety of needs depending on the designations and certifications of the appraiser involved; appraisers can perform a multitude of different services, including benefit/cost analysis, tax assessment, legal dispute resolution, and even estate planning.
Myth: You don't have to get an appraisal if you have had a home inspection.
Fact: Appraisal reports are completely different than a home inspection report. The reason behind an appraisal is to find an opinion of fair market value during the appraisal process and the completion of the appraisal report. House inspectors will compose a report that will explain the condition of the property and its major components and possible damage.