Appraisal myths & facts
Legally, an appraiser has to be state certified to create substantiated real estate appraisals for federally-supported sales. The law entitles you to receive a copy of your finished report from your lending agency after it has been provided. Contact our professional staff if you have any concerns about the appraisal process.
Myth: The value that is assessed by the appraiser should be equivalent to the market value.
Fact: While most states support the concept that assessed value approximates estimated market value, this often is not the case. Examples include when interior reconstruction has occurred and the assessor is unaware of the improvements, or when houses in the vicinity have not been reassessed for an extended period of time.
Myth: The value of a property will differ depending upon whether the appraisal is provided for the buyer or the seller.
Fact: The price of the home does not affect the salary of the appraiser; due to this, the appraiser has no vested interest in the cost of the house. Obviously, he will render task with impartiality and independence 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 outside parties to buy or sell, market value is what a willing buyer would pay a willing seller for a particular house. Replacement value is the dollar amount necessary to rebuild a property in-kind.
Myth: Certain methods, like the price per square foot, are the ways appraisers use to arrive at the cost of a property.
Fact: An appraisal is an assertion of data concluded from the home's size, location, proximity to specific facilities, the condition of the house and the value of recent comparable sales. You can count on The Welter Appraisal Group's staff to be honest in assessing this information.
Myth: In a strong economy - when the costs of houses in a given county are found to be appreciating by a certain percentage - the values of individual properties in the vicinity can be expected to increase by that same percentage.
Fact: Cost appreciation of a certain property must be determined on an individualized basis, factoring in information on comparable properties and other relevant specifications within the home itself. 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: The house's outside is determinate of the actual price of the property; it is unnecessary to do an interior inspection.
Fact: Home worth is concluded by a number of variables, including - but not limited to - area, condition, improvements, amenities, and market trends. There's no real way to get all of this information from just viewing the property from the exterior.
Myth: Because consumers fund appraisal reports when applying for loans to purchase or refinance real estate, they own their appraisal.
Fact: Legally, the report is owned by the lender unless the lender releases their interest in the document. However, consumers must be given a copy of the appraisal report upon written request, through the Equal Credit Opportunity Act.
Myth: Home buyers need not worry about what is in their report so long as it satisfies the needs of their lending institution.
Fact: It is a very good idea for home buyers to peruse a copy of their report so that they can verify the accuracy of the document, in case it's required to question its accuracy. Remember, this is probably the most expensive and important investment a consumer will ever make. An appraisal can serve as a record for the future, containing an incredible amount of data - including, but certainly 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: The only reason someone would hire an appraiser is if a home needs its worth estimated in a lender sales transaction.
Fact: Hiring an appraiser can fulfill a variety of necessities depending on the designations and certifications of the appraiser involved; appraisers can provide a multitude 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: Appraisal reports are definitely not the same as a home inspection. An appraiser concludes on an opinion of value in the appraisal process and resulting report. House inspectors will compose a report that will explain the condition of the property and its major components and possible damage.