Common myths about appraising
It is enforced by legal agencies that an appraiser must be state-licensed to produce appraisals for federally-supported home purchases in New Jersey. You also have the right to demand a copy of the finished appraisal report from your lending agency. Contact The Welter Appraisal Group if you have any concerns about the appraisal process.
Myth: Market value will be equivocal to the assessed value of the property.
Fact: It might be that New Jersey, like most states, validates the common myth that the assessed value equates to the market value; however, this is not often the case. Examples include when interior remodeling has occurred and the assessor has not seen the improvements, or when houses in the vicinity have not been reassessed for an extended period.
Myth: The value of a home will change depending upon if the appraisal is conducted for the buyer or the seller.
Fact: There is no personal interest on the part of the appraiser in the outcome of the appraisal, therefore he will conduct his work with impartiality and independence, despite for whom the appraisal is written.
Myth: Any time market value is established, it should be the same as the replacement cost of the property.
Fact: Market value is acquired by what a willing buyer would be interested in paying a willing seller for a particular home, with neither being under undue influence to buy or sell. Replacement value is the dollar amount necessary to rebuild a house in-kind.
Myth: Appraisers use a calculation, such as a specific price per square foot, to figure out the value of a house.
Fact: There are many numerous methods that an appraiser will use to make a comprehensive analysis of every factor in consideration of the house, such as the size, location, condition, how close it is to specific facilities and the value of recently sold comparable homes.
Myth: As properties increase their worth by a certain percentage - in a robust economic state - the homes within the same neighborhood are expected to increase by the same amount.
Fact: Worth appreciation of a specific home has to be determined on an individualized basis, factoring in data on comparable properties and other relevant elements. It doesn't matter if the economy is on the rise or declining.
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Myth: The home's exterior is determinate of the actual value of the property; it is unnecessary to do an interior inspection.
Fact: To find an accurate price beyond all doubt, an appraiser must inspect the property on a variety of factors based on area, condition, improvements, amenities, and market trends. An outside-only inspection obviously can't provide all of the information necessary.
Myth: Because consumers pay for the appraisal when applying for loans to buy or refinance their home, they own their appraisal.
Fact: Legally, the appraisal report is owned by the lending agency unless the lender relinquishes their interest in the appraisal. Under the Equal Credit Opportunity Act, any home buyer asking for a copy of the appraisal report must be provided with one by their lender.
Myth: It doesn't matter to consumers what's in the appraisal so long as it satisfies the needs of their lending company.
Fact: It is a very good idea for consumers to check over a copy of their appraisal so that they can verify the accuracy of the report, in case it's required to question its veracity. Remember, this is probably the most expensive and important investment a consumer will ever make. An appraisal report can double as a record for the future, as it contains an exorbitant amount of information - including, but not limited to 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 order an appraisal unless you are trying to get an estimate of the cost of a home during a sales transaction involving a lender.
Fact: Ordering an appraisal can fulfill a variety of wants 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: You don't need to get an appraisal if you have had a home inspection.
Fact: A home inspection report has a completely different purpose than an appraisal. The purpose of the appraiser is to arrive at an opinion of value in the appraisal process and through writing the report. House inspectors will compose a report that will express the condition of the home and its major components and possible damage.