Common myths about appraising

It is required by the government that a real estate appraiser needs to be state-licensed to perform appraisals for federally-related home transactions in New Jersey. The law gives you the right to acquire a copy of your finished appraisal from your lending agency after it has been produced. Contact us if you have any concerns about the appraisal process.

Myth: The value that is assessed by the appraiser must be exactly the same as the market value.

Fact: This usually isn't true; most states do support the suggestion that the assessed value is the same as market value, but not always. Interior remodeling that the assessor has not investigated and a dearth of reassessment on nearby houses are exact examples of why there might be a differential in price.

Myth: Depending on whether the appraisal is ordered for the buyer or the seller, the cost of the property will vary.

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

Myth: Market value will approximate replacement cost.

Fact: Without any influence from any different parties to buy or sell, market value is what a willing buyer would pay an interested seller for a particular home. The dollar amount demanded to rebuild a home is what forms the replacement cost.

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

Fact: There are many differing methods that an appraiser will use to make a detailed investigation of every factor in consideration of the house, such as the size, location, condition, how close it is to specific facilities and the value of recently sold comparable properties.

Myth: As houses increase their worth by a certain percentage - in a robust economic state - the houses in proximity are figured to appreciate by the same amount.

Fact: Any value at which an appraiser arrives concerning a particular home is always personalized, based on certain factors pulled from the data of comparable properties and other specifications within the house itself. It doesn't matter if the economy is doing well or declining.

Myth: You can generally see what a home is worth simply by looking at the outside.

Fact: Property worth is determined by a number of factors, including area, condition, improvements, amenities, and market trends. There's no possible way to get all of this information from simply looking at the home from the outside.

Myth: Considering that the consumer is the one who puts up the money to pay for the appraisal when applying for a loan for any real estate transaction, by law the appraisal report is theirs.

Fact: Unless a lending agency releases its vestment in the document, it is legally owned by the lending agency that ordered the appraisal. Consumers must be given a version of the appraisal report through request because of the Equal Credit Opportunity Act.

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

Fact: A home buyer should definitely inspect their appraisal report; there may be some questions or some worries with the accuracy of the appraisal that must be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the appraisal makes a near perfect record for future reference, containing helpful 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 vicinity.