Appraisal myths debunked
Legally, an appraiser has to be state certified to produce legitimate real estate appraisals for federally-related transactions. Also by law, you have the right to receive a copy of the completed appraisal report from your lending agency. Contact us if you have any questions about the appraisal process.
Myth: The value that is assessed by the appraiser is required to be exactly the same as the market value.
Fact: This is not often the case; most states do support the idea that the assessed value is the same as market value, but not always. Usually when interior remodeling has been done and the assessor is unaware of the improvement or other houses in the neighborhood have not been reassessed for quite a while, it may vary wildly.
Myth: Depending on if the appraisal is ordered for the buyer or the seller, the opinion of value of the property will vary.
Fact: The appraiser has no vested interest in the result of the appraisal report and should complete his job with independence, objectivity and impartiality - no matter for whom the appraisal is written.
Myth: Market value will be the same as replacement cost.
Fact: Without any pressure from any outside parties to buy or sell, market value is what a willing buyer would pay an interested seller for a particular house. Replacement cost is the dollar amount required to reconstruct a property in-kind.
Myth: Certain formulae, like the price per square foot, are what appraisers use to come to the cost of a house.
Fact: Appraisers make a detailed analysis of all factors in consideration to the cost of a house, including its location, condition, size, proximity to facilities and recent sale prices of comparable homes.
Myth: In a powerful economy - when the sales prices of houses in a given area are found to be appreciating by a particular percentage - the costs of individual houses in the proximity can be expected to increase by that same percentage.
Fact: Any cost at which an appraiser arrives in regards to a certain house is always individualized, based on certain factors concluded from the data of comparable houses and other specifications within the home itself. It makes no difference whether the economy is excellent or terrible.
Have other questions about appraisers, appraising or real estate in Union County or Princeton, NJ?Contact Tight & Right Real Estate Valuation
Myth: The property's exterior is determinate of the actual value of the home; there is no need to do an interior appraisal.
Fact: There are a number of different factors that determine the value of a house; these factors include area, condition, improvements, amenities, and market trends. There's no possible way to get all of this data from simply inspecting the house from the exterior.
Myth: Because the consumer is the party who provides the money to pay for the appraisal report when applying for a loan for any real estate transaction, by law the appraisal report belongs to them.
Fact: Legally, the document is owned by the lender unless the lender releases their interest in the appraisal. Because of the Equal Credit Opportunity Act, any home buyer requesting a copy of the report must be given it by their lender.
Myth: Home buyers need not care about what is in their appraisal report so long as it satisfies the requirements of their lending company.
Fact: A consumer should definitely read through their appraisal report; there could be some questions or some worries with the accuracy of the analysis that must be addressed. 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, since it contains 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 proximity.
Myth: There is no reason to order an appraisal unless you are trying to get an estimate of the cost of a property during a sales transaction involving a lending company.
Fact: Hiring an appraiser can fulfill a variety of requirements 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: An appraisal is the same as a home inspection report.
Fact: Appraisal reports are definitely not the same as a home inspection. The purpose of the appraiser is to come to an opinion of value in the appraisal process and through producing the report. A home inspector assesses the condition of the house and its main components and reports these findings.
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