Appraisal myths & facts
Legally, an appraiser must be state certified to write substantiated real estate appraisals for federally-supported sales. You have the ability to demand a copy of the finished report from your lender. Contact us if you have any questions about the appraisal process.
Myth: Market value should be the same as the assessed value of the property.
Fact: It is probable that Ohio, like most states, supports the idea that the assessed value is the same as the market value; however, this is not often the case. There are times when interior remodeling has been done and the assessor is unaware of the improvement or other homes in the neighborhood have not been reassessed for quite a while, it may vary wildly.
Myth: The buyer or the seller will have impact in the cost of the home depending upon for whom the appraiser is working.
Fact: The appraiser has no personal interest in the result of the report and should complete services with independence, objectivity and impartiality - no matter for whom the appraisal is conducted.
Myth: Market value will approximate replacement cost.
Fact: The way market value is arrived at is based on what a buyer would be willing to pay a willing seller for a home without being under duress from any outside group to buy or sell. The dollar amount needed to rebuild a home is what forms the replacement cost.
Myth: Appraisers use a calculation, such as a certain price per square foot, to conclude the value of a property.
Fact: There are many differing calculations that an appraiser will use to make a full analysis of every factor pertaining to the house, such as the size, location, condition, how close it is to specific facilities and the value of recently sold comparable houses.
Myth: When the economy is on the rise and the sales prices of properties are found to be rising by a certain percentage, the other houses in the proximity can be expected to increase based on that same percentage.
Fact: Worth increase of a certain home must be concluded on a case-by-case basis, factoring in information on comparable houses and other relevant specifications within the home itself. It doesn't matter if the economy is on the rise or declining.
Have other questions about appraisers, appraising or real estate in Montgomery County or Dayton, OH?Contact us
Myth: You can usually find what a property is worth simply by looking at the exterior.
Fact: To find an accurate value beyond all doubt, an appraiser must inspect the property on a variety of factors based on location, condition, improvements, amenities, and market trends. There's no real way to get all of this information from simply looking at the property from the outside.
Myth: Since you're the one coughing up the cash for the appraisal when applying for your loan to buy or refinance real estate, you own the produced appraisal.
Fact: The document is, in fact, legally owned by the lender - unless the lender "releases its interest" in the document. However, home buyers must be given a copy of the document upon written request, due to the Equal Credit Opportunity Act.
Myth: There's no need for consumers to even concern themselves with what the appraisal report contains so long as their lending agency is satisfied.
Fact: A consumer should definitely inspect their document; there may be some questions or some worries about the accuracy of the inspection that should be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. There is an incredible amount of data contained 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: Appraisers are hired only to estimate real estate property values in house sales involving mortgage-lending deals.
Fact: Based upon their qualifications and designations, appraisers can and do provide a multitude of services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: A property inspection serves the same purpose as an appraisal.
Fact: Appraisal reports have almost nothing in common with a home inspection report. The purpose of the appraiser is to find an opinion of value in the appraisal process and through writing the report. A home inspector determines the condition of the building and its major components and reports these findings.