Appraisal myths & facts

Legally, a real estate appraiser needs to be state certified to produce legitimate appraisal reports for federally-backed purchase. You have the ability to acquire a copy of the completed appraisal report from your lender. Contact us if you have any questions about the appraisal procedure.

Myth: Assessed value will always be equal to market value.

Fact: This usually isn't true; most states do support the concept that the assessed value is the same as market value, but not always. Interior reconstruction that the assessor is unaware of and a lack of reassessment on nearby homes are excellent examples of why the price can vary.

Myth: Depending on if the appraisal is provided for the buyer or the seller, the opinion of value of the property will vary.

Fact: The appraised value of the home does not affect the salary of the appraiser; as such, the appraiser has no pressured interest in the value of the house. This means that he will provide task with impartiality and objectivity regardless for whom the appraisal is provided.

Myth: The replacement value of the property is always is on par with the market value.

Fact: Market value is found by what a willing buyer would likely pay a willing seller for a certain property, with neither being under pressure to buy or sell. If the property were reconstructed, the dollar amount required to do so would form the replacement cost.

Myth: Certain formulae, such as the price per square foot, are the ways appraisers use to come to the cost of a house.

Fact: Appraisers complete a comprehensive analysis of all factors in consideration to the cost of a home, including its location, condition, size, proximity to facilities and recent sale prices of comparable homes.

Myth: In a strong economy - when the prices of homes in a given neighborhood are reported to be rising by a certain percentage - the worth of individual properties in the proximity can be expected to rise by that same percentage.

Fact: Any cost at which an appraiser concludes in regards to a certain property is always individualized, based on certain factors pulled from the data of comparable homes and other specifications within the home itself. This is true in fair economic times as well as poor.

Have other questions about appraisers, appraising or real estate in Union County or Princeton, NJ?

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

Fact: There are a multitude of different factors that conclude the value of a house; these factors include area, condition, improvements, amenities, and market trends. There's no real way to get all of this data from simply looking at the property from the outside.

Myth: Since you're the one paying for the appraisal when applying for your loan to purchase or refinance your home, you own the ordered appraisal report.

Fact: The appraisal report is, in fact, legally owned by the lender - unless the lender "releases its interest" in the document. However, consumers have to be given a copy of the appraisal upon written request, because of the Equal Credit Opportunity Act.

Myth: Home buyers need not care about what is in their report so long as it meets the requirements of their lending institution.

Fact: It is almost imperative for consumers to peruse a copy of their appraisal report so that they can double-check the accuracy of the report, in case there is a need to question its accuracy. Remember, this is probably the most expensive and important investment a consumer will ever make. There is a great deal of data contained in an appraisal that will probably be useful to the consumer in the future, such as 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 vicinity.

Myth: The only reason someone would hire an appraiser is if a property needs its worth assessed in a lender-based sales transaction.

Fact: Depending upon their qualifications and designations, appraisers can and do provide a lot of different services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.

Myth: You don't need to get an appraisal if you get a home inspection.

Fact: A home inspection report has a completely different purpose than an appraisal report. The job of the appraiser is to conclude an opinion of value in the appraisal process and through producing the report. The task of a home inspector is to determine the condition of the house and its major components, then produce a report on these conclusions.

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