Appraisal myths debunked
Legally, a real estate appraiser must be state certified to produce legitimate appraisal reports for federally-backed sales. You are also entitled by law to acquire a copy of the finished appraisal report from your lending agency. Contact our professional staff if you have any concerns about the appraisal process.
Myth: Market value has to be similar to the assessed value of the property.
Fact: It is probable that Ohio, like most states, supports the idea that the assessed value equals the market value; however, this is not always true. Examples include when interior reconstruction has occurred and the assessor does not know about the improvements, or when homes in the area have not been reassessed for an extended time.
Myth: The value of a house will be different depending upon if the appraisal is provided for the buyer or the seller.
Fact: The appraiser has no personal interest in the result of the report and should render services with independence, objectivity and impartiality - no matter for whom the appraisal is conducted.
Myth: Market value will equate to replacement cost.
Fact: Without any suggestion from any external parties to purchase or sell, market value is what a willing buyer would pay a willing seller for a specific home. If the home were reconstructed, the dollar amount necessary to do so would form the replacement cost.
Myth: There are certain methods that appraisers use to find the cost of a property, such as the price per square foot.
Fact: Appraisers make an exhaustive analysis of all factors in consideration to the price of a home, including its location, condition, size, proximity to facilities and recent sale prices of comparable properties.
Myth: In a strong economy - when the prices of properties in a given region are reported to be increasing by a certain percentage - the worth of individual properties in the vicinity can be expected to increase by that same percentage.
Fact: Any price at which an appraiser arrives in regards to a particular home is always personalized, based on certain factors derived from the information of comparable homes and other specifications within the home itself. It doesn't matter if the economy is on the rise or declining.
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Myth: The home's exterior is determinate of the actual worth of the home; there is no need to do an interior appraisal.
Fact: To find an accurate price beyond all doubt, an appraiser must examine the house on a variety of factors based on area, condition, improvements, amenities, and market trends. Obviously, none of these variables can be derived simply by viewing the home from the exterior.
Myth: Because consumers pay for appraisals when applying for loans to purchase or refinance real estate, they legally own their appraisal report.
Fact: Unless a lender releases its vestment in the document, it is legally owned by the lending agency that purchased the appraisal. Under the Equal Credit Opportunity Act, any consumer asking for a copy of the report must be provided with it by their lending company.
Myth: There's no need for home buyers to even care about what the appraisal contains so long as their lender is fine with the contents therein.
Fact: A home buyer should definitely inspect their document; there may be some questions or some concerns about the accuracy of the appraisal that should be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. There is a wealth of data contained in an report that can be useful to the consumer 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: There is no reason to order an appraisal unless you are trying to get an estimate of the price of a home during a sales transaction involving a lending institution.
Fact: Hiring an appraiser can fulfill a variety of necessities depending on the designations and certifications of the appraiser involved; appraisers can perform a multitude of different services, including benefit/cost analysis, tax assessment, legal dispute resolution, and even estate planning.
Myth: There's no need to get an appraisal if you have had a home inspection.
Fact: Appraisal reports are nothing like a home inspection report. An appraiser concludes on an opinion of value in the appraisal process and resulting appraisal report. The job of a home inspector is to approximate the condition of the house and its major components, then create a report on these inspection.