Common myths about appraising

It is mandated by law that an appraiser is required to be state-licensed to produce appraisal reports for federally-supported home sales in New Jersey. You are also entitled by law to acquire a copy of the completed report from your lender. Contact us if you have any questions about the appraisal process.

Myth: The value that is ascertained by the appraiser will be exactly the same as the market value.

Fact: While most states uphold the suggestion that assessed value is the same as estimated market value, this usually is not the case. Examples include when interior remodeling has happened and the assessor does not know about the improvements, or when houses in the area have not been reassessed for an extended period of time.

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

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

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

Fact: The way market value is found is based on what a home buyer would be willing to pay a willing seller for a property without being under duress from any external group to buy or sell. The dollar amount demanded to reconstruct a house is what shows the replacement cost.

Myth: Certain methods, like the price per square foot, are the ways appraisers use to ascertain the cost of a house.

Fact: An appraisal report is a collection of data concluded from the property's size, location, proximity to specific facilities, the condition of the house and the cost of recent comparable sales. You can depend on CCR Appraisal Service's staff to be professional in assessing this data.

Myth: As properties increase their worth by a specific percentage - in a robust economy - the houses in proximity are expected to appreciate by the same amount.

Fact: Value appreciation of a specific property is always concluded on a case-by-case basis, factoring in information on comparable properties and other relevant elements. It doesn't matter if the economy is doing well or declining.

Myth: You can commonly find what a house is worth simply by looking at the outside.

Fact: Home worth is determined by a number of factors, including - but not limited to - area, condition, improvements, amenities, and market trends. There's no real way to get all of this information from just looking at the house from the exterior.

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

Fact: The document is, in fact, legally owned by the lending company - unless the lender "relinquishes its interest" in the document. Consumers have to be supplied with a version of the appraisal report upon written request because of the Equal Credit Opportunity Act.

Myth: Home buyers need not worry about what is in their appraisal report so long as it exceeds the necessities of their lending company.

Fact: Only if home buyers look at a copy of their appraisal can they ensure its accuracy and possibly need to question the result. Remember, this is probably the most expensive and important investment a consumer will ever make. An appraisal can double as a record for the future, since it contains an exorbitant amount of data - including, but certainly 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.