Myth: Assessed value should always be equal to market value.
Reality: While most states back the concept that assessed value is the same as estimated market value, this commonly is not the case.
Examples include when interior reconstruction has happened and the assessor is unaware of the improvements, or when houses in the area have not been reassessed for an extended time.
Myth: Depending on if the appraisal is ordered for the buyer or the seller, the opinion of value of the property will vary.
Reality: The appraiser has no personal interest in the result of the appraisal report and should conduct his job with independence, objectivity and impartiality - no matter for whom the appraisal is provided.
Myth: The replacement value of the property is always in line with the market value.
Reality: Market value is arrived at through what a willing buyer would likely pay a willing seller for a particular home, with neither being under pressure to buy or sell.
Replacement value is the dollar amount required to rebuild a home in-kind.
Myth: Specific methods, like the price per square foot, are the ways appraisers use to determine the value of a home.
Reality: An appraisal report is an amalgamation of information based on the home's size, location, proximity to undesirable facilities, the condition of the property and the values of recent comparable sales. You can depend on Jersey Capital Appraisal Service's staff to be forthright in assessing this data.
Myth: As properties appreciate by a certain percentage - in a robust economy - the houses around the appreciating properties are expected to appreciate by the same amount.
Reality: Any value an appraiser reports in regards to a particular home is always individualized, based on certain factors concluded from the data of comparable homes and other considerations within the property itself.
It doesn't matter if the economy is on the rise or declining.
Myth: Just seeing what the property looks like on the outside gives a good idea of its value.
Reality: There are a number of different variables that show property value; these factors include area, condition, improvements, amenities, and market trends.
An outside-only inspection definitely can't provide all of the information needed.
Myth: Because consumers pay for appraisals when applying for loans to buy or refinance their home, they own their appraisal report.
Reality: The appraisal is, in fact, legally owned by the lending agency - unless the lender "releases its interest" in the appraisal.
By the Equal Credit Opportunity Act, any home buyer requesting a copy of the document must be given one by their lending agency.
Myth: Consumers need not care about what is in their appraisal report so long as it satisfies the needs of their lending company.
Reality: Only when home buyers look at a copy of their appraisal report can they ensure its accuracy and know if they should ask questions. Remember, this is probably the most expensive and important investment a consumer will ever make.
An appraisal report can double as a record for the future, containing a great deal 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.
Myth: Appraisals are ordered only to estimate home values in property sales involving mortgage-lending transactions.
Reality: Appraisers can have many different qualifications and designations which allow them to perform a lot of different services including - but not limited to - advice on estate planning, tax assessment, zoning, dispute resolution in many different legal situations and cost analysis.
Myth: You don't have to get an appraisal if you get a home inspection.
Reality: An appraisal report does not fulfill the same purpose as an inspection.
An appraiser decides upon an opinion of value in the appraisal process and resulting report.
The job of a home inspector is to assess the condition of the house and its main components, then provide a report on these conclusions.
