Appraisal myths & facts

It is required by law that a real estate appraiser is required to be state-licensed to write appraisals for federally-supported real estate transactions in New Jersey. You have the ability to acquire a copy of the finished appraisal from your lender. Contact The Welter Appraisal Group if you have any concerns about the appraisal procedure.

Myth: Assessed value will always be equal to market value.

Fact: While most states uphold the suggestion that assessed value approximates estimated market value, this usually is not the case. Examples include when interior remodeling has happened and the assessor is unaware of the improvements, or when properties in the vicinity have not been reassessed for an extended period.

Myth: The appraised value of a property will be different depending upon whether the appraisal is ordered for the buyer or the seller.

Fact: The opinion of value of the house does not affect the pay of the appraiser; as a result, the appraiser has no vested interest in the worth of the house. What this means is he will conduct task with impartiality and objectivity regardless for whom the appraisal is produced.

Myth: Any time market value is established, it should equate to the replacement cost of the house.

Fact: Without any influence from any external parties to buy or sell, market value is what a willing buyer would pay an interested seller for a particular home. The dollar amount needed to rebuild a home is what shows the replacement cost.

Myth: Appraisers use a calculation, such as a certain price per square foot, to conclude the value of a home.

Fact: An appraisal report is a collection of information based on the home's size, location, proximity to specific facilities, the condition of the property and the value of recent comparable sales. You can depend on The Welter Appraisal Group's staff to be ethical in assessing this information.

Myth: As properties increase their worth by a certain percentage - in a robust economy - the houses in proximity are figured to increase by the same amount.

Fact: All increase of price is on a case-by-case basis, found by data on relevant considerations and the data of comparable houses. This is true in good economic times as well as bad.

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Myth: You can usually find what a property is worth simply by looking at the outside.

Fact: To find an accurate value beyond all doubt, an appraiser must examine the property on a variety of factors based on location, condition, improvements, amenities, and current market trends. Obviously, none of these factors can be found simply by inspecting the home from the exterior.

Myth: Since you're the one funding for the appraisal when applying for your loan to purchase or refinance real estate, you own the provided appraisal report.

Fact: The document is, in fact, legally owned by the lending agency - unless the lender "relinquishes its interest" in the document. However, consumers have to be given a copy of the appraisal upon written request, because of the Equal Credit Opportunity Act.

Myth: Consumers need not worry about what is in their report so long as it exceeds the necessities of their lending institution.

Fact: It is a very good idea for home buyers to read a copy of their report so that they can double-check the accuracy of the document, in case it's required to question its veracity. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the appraisal report 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: Appraisers are hired only to assess home values in house sales involving mortgage-lending deals.

Fact: Ordering an appraisal can fulfill a variety of necessities depending on the designations and certifications of the appraiser involved; appraisers can perform a variety of different services, including benefit/cost analysis, tax assessment, legal dispute resolution, and even estate planning.

Myth: A property inspection serves the same purpose as an appraisal.

Fact: An appraisal does not serve the same purpose as an inspection report. The purpose of the appraiser is to come to an opinion of value in the appraisal process and through writing the report. House inspectors will compose a report that will determine the condition of the home and its major components and possible damage.