Appraisal myths debunked

By law, an appraiser needs to be state-licensed to perform appraisals for federally-related transactions. The law gives you the right to get a copy of your finished report from your lending agency after it has been produced. Contact us if you have any questions about the appraisal process.

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

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. Interior remodeling that the assessor has not investigated and a dearth of reassessment on nearby homes are perfect examples of why there might be a differential in price.

Myth: The buyer or the seller often will have an influence in the cost of the property depending upon for whom the appraiser is working.

Fact: The appraiser has no personal interest in the result of the appraisal and should conduct services with independence, objectivity and impartiality - no matter for whom the appraisal is conducted.

Myth: Any time market value is found, it should equate to the replacement cost of the house.

Fact: Without any suggestion from any different parties to purchase or sell, market value is what a willing buyer would pay an interested seller for a particular home. If the home were rebuilt, the dollar amount necessary to do so would be the replacement cost.

Myth: Specific formulae, like the price per square foot, are the methods appraisers use to determine the cost of a house.

Fact: An appraisal is a collection of data based on the home's size, location, proximity to undesirable facilities, the condition of the home and the worth of recent comparable sales. You can count on Tight & Right Real Estate Valuation's staff to be ethical in assessing this information.

Myth: When the economy is on the rise and the cost of properties are found to be increasing by a certain percentage, the other properties in the area can be expected to rise based on that same percentage.

Fact: Any value at which an appraiser arrives concerning a certain house is always personalized, based on certain factors derived from the data of comparable properties and other specifications within the property itself. It makes no difference if the economy is strong or bad.

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

Contact Tight & Right Real Estate Valuation

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

Fact: To determine an accurate worth 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 certainly can't provide all of the data required.

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

Fact: Legally, the appraisal report is owned by the lending agency unless the lender relinquishes their interest in the report. Consumers have to be supplied with a version of the document through request due to the Equal Credit Opportunity Act.

Myth: There's no point for consumers to even concern themselves with what the appraisal report contains so long as their lending company is satisfied.

Fact: It is very important for home buyers to read a copy of their report so that they can double-check 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. There is an incredible amount of information stored in an report that will probably be useful to the home buyer 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 proximity.

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

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

Myth: There's no need to get an appraisal if you get a home inspection.

Fact: Appraisal reports are definitely not the same as a home inspection. The function of an appraisal report is to conclude upon an opinion of fair market value during the appraisal process and the production of the appraisal report. The task of a home inspector is to approximate the condition of the house and its major components, then compose a report on their conclusions.

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