Appraisal myths & facts

It is enforced by law that an appraiser needs to be state-licensed to create appraisal reports for federally-related home purchases in New Jersey. The law allows you to acquire a copy of your finished appraisal report from your lender after it has been produced. Contact us if you have any questions about the appraisal procedure.

Myth: Market value must be equivocal to the assessed value of the property.

Fact: It could be that New Jersey, like most states, validates the common myth that the assessed value is no different from the market value; however, this is sometimes the exception rather than the rule. Examples include when interior remodeling has occurred 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 value of a house will differ depending upon if the appraisal is ordered for the buyer or the seller.

Fact: The cost of the home does not affect the payment of the appraiser; as a result, the appraiser has no vested interest in the worth of the property. This means that he will conduct business with impartiality and objectivity regardless for whom the appraisal is conducted.

Myth: The replacement cost of the house will be is on par with the market value.

Fact: Market value is derived from what a willing buyer would likely pay a willing seller for a particular home, with neither being under undue influence to buy or sell. Replacement value is the dollar amount required to reconstruct a home in-kind.

Myth: There are specific ways that real estate appraisers use to find the cost of a home, like the price per square foot.

Fact: An appraisal report is an assertion of information concluded from the house's size, location, proximity to specific facilities, the condition of the home and the value of recent comparable sales. You can rely on The Welter Appraisal Group's appraisers to be professional in assessing this data.

Myth: As houses appreciate by a certain percentage - in a robust economy - the homes in proximity are expected to appreciate by the same amount.

Fact: Value appreciation of a specific property must be determined on an individualized basis, factoring in information on comparable properties and other relevant specifications within the home itself. This is true in fair economic times as well as bad.

Myth: The property's outside is determinate of the actual value of the home; there is no need to do an interior appraisal.

Fact: To conclude an accurate value beyond all doubt, an appraiser must examine the home on a variety of factors based on area, condition, improvements, amenities, and current market trends. An external inspection definitely can't provide all of the information required.

Myth: Because consumers fund appraisals when applying for loans to buy or refinance real estate, they own their appraisal.

Fact: Legally, the appraisal is owned by the lending company unless the lender releases their interest in the report. Consumers have to be provided with a copy of the report upon written request because of the Equal Credit Opportunity Act.

Myth: There's no need for consumers to even worry about what the report contains so long as their lending institution is fine with the contents therein.

Fact: It is very important for home buyers to read a copy of their report so that they can verify the accuracy of the document, in case there is a need to question its veracity. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the report makes an invaluable record for future reference, filled with useful and often-revealing data - 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.