Appraisal myths debunked

By law, an appraiser needs to be state-licensed to perform appraisals for federally-supported sales. Also by law, you have the right to receive a copy of the finished report from your lender. Contact our professional staff if you have any concerns about the appraisal procedure.

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

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. Usually when interior remodeling has occurred and the assessor is unaware of the improvement or other houses in the Cape May have not been reassessed for quite some time, it may vary wildly.

Myth: Depending on if the appraisal is produced for the buyer or the seller, the cost of the home will vary.

Fact: There is no vested interest on the part of the appraiser in the outcome of the appraisal, therefore he will conduct his work with impartiality and independence, regardless for whom the appraisal is created.

Myth: The replacement value of the house is always 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 house, with neither being under duress to buy or sell. Replacement value is the dollar amount necessary to reconstruct a home in-kind.

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

Fact: An appraisal is an assertion of information concluded from the home's size, location, proximity to some facilities, the condition of the property and the worth of recent comparable sales. You can count on James M Hanson Associates, Inc's staff to be honest in assessing this information.

Myth: As homes increase their worth by a specific percentage - in a robust economic state - the houses around the appreciating properties are expected to appreciate by the same amount.

Fact: Price appreciation of a specific house must be determined on an individualized basis, factoring in information on comparable houses and other relevant considerations. It doesn't matter if the economy is on the rise or declining.

Myth: The house's outside is determinate of the actual worth of the house; there is no need to do an interior inspection.

Fact: House worth is concluded by a multitude of variables, including area, condition, improvements, amenities, and market trends. There's no real way to get all of this information from simply inspecting the house from the outside.

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

Fact: Unless a lender releases its vestment in the appraisal report, it is legally owned by the lending company that ordered the appraisal. Consumers have to be supplied with a copy of the document through request due to the Equal Credit Opportunity Act.

Myth: Home buyers need not worry about what is in their document so long as it meets the needs of their lending company.

Fact: A home buyer should definitely inspect their report; there may be some questions or some concerns with the accuracy of the report that should be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. An appraisal report can serve as a record for the future, containing an exorbitant amount of information - 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.