Common myths about appraising

Legally, a real estate appraiser must be state certified to write legitimate real estate appraisals for federally-supported purchase. You have the ability to demand a copy of the finished appraisal report from your lending agency. Contact our professional staff if you have any questions about the appraisal procedure.

Myth: The value that is assessed by the appraiser must be equivalent to the market value.

Fact: It might be that New Jersey, like most states, validates the suggestion that the assessed value is the same as the market value; however, this is not always true. Examples include when interior reconstruction has happened and the assessor is unaware of the improvements, or when homes in the vicinity have not been reassessed for an prolonged period of time.

Myth: The buyer or the seller may have some pull in the value of the house depending upon for whom the appraiser is working.

Fact: The appraiser has no personal interest in the result of the report and should render his task with independence, objectivity and impartiality - no matter for whom the appraisal is provided.

Myth: Any time market value is established, it should be the same as the replacement cost of the house.

Fact: Without any influence from any different parties to purchase or sell, market value is what a willing buyer would pay a willing seller for a particular property. The dollar amount required to reconstruct a house is what forms the replacement cost.

Myth: There are specific 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 calculations that an appraiser will use to make a detailed investigation of every factor in consideration of the property, such as the size, location, condition, how close it is to specific facilities and the sales price of recently sold comparable properties.

Myth: As properties appreciate by a certain percentage - in a robust economic state - the houses around the appreciating properties are figured to appreciate by the same amount.

Fact: Cost appreciation of a specific home must be concluded on an individualized basis, factoring in information on comparable houses and other relevant specifications within the home itself. It makes no difference whether the economy is excellent or poor.

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Myth: You can often tell what a property is worth simply by looking at the exterior.

Fact: There are a number of different factors that show the value of a home; these factors include location, condition, improvements, amenities, and market trends. There's no possible way to get all of this data from simply viewing the home from the exterior.

Myth: Because consumers fund the appraisal when applying for loans to purchase or refinance their property, they legally own their appraisal.

Fact: Legally, the appraisal is owned by the lender unless the lender relinquishes their interest in the report. Home buyers must be supplied with a copy of the document through request as per the Equal Credit Opportunity Act.

Myth: It doesn't concern consumers what's in the appraisal so long as it satisfies the needs of their lender.

Fact: Only if consumers read a copy of their report can they ensure its accuracy and possibly need to question the result. 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, since it contains a great deal 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 proximity.

Myth: There is no reason to hire an appraiser unless you are trying to get an assessment of the worth of a property during a sales transaction involving a lending institution.

Fact: Ordering an appraisal can fulfill a variety of necessities depending on the designations and certifications of the appraiser involved; appraisers can provide 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 point of an appraisal report is to find an opinion of fair market value during the appraisal process and the completion of the report. A home inspector assesses the condition of the house and its major components and reports their findings.