Common myths about appraising

It is required by legal agencies that an appraiser is required to be state-licensed to offer appraisal reports for federally-related real estate transactions in Ohio. The law entitles you to receive a copy of your completed appraisal report from your lending agency after it has been provided. Contact us if you have any concerns about the appraisal procedure.

Myth: Assessed value should be equal to market value.

Fact: While most states uphold the suggestion that assessed value approximates estimated market value, this generally is not the case. Interior reconstruction that the assessor is not aware of and a lack of reassessment on nearby houses are prime examples of why this occurs.

Myth: The value of a home will be different depending upon whether the appraisal is provided for the buyer or the seller.

Fact: There is no personal interest on the part of the appraiser in the outcome of the report, therefore he will complete his work with impartiality and independence, despite for whom the appraisal is ordered.

Myth: Any time market value is found, it should be the same as the replacement cost of the property.

Fact: Without any influence from any outside parties to buy or sell, market value is what a willing buyer would pay a willing seller for a specific home. The replacement cost is the dollar amount needed to reconstruct a property in-kind.

Myth: Appraisers use a formula, like a certain price per square foot, to figure out the value of a house.

Fact: There are many numerous ways that an appraiser will use to make an in-depth analysis of every factor pertaining to the property, such as the size, location, condition, how close it is to certain facilities and the sales price of recently sold comparable properties.

Myth: When the economy is robust and the sales prices of houses are reported to be rising by a certain percentage, the other homes in the proximity can be expected to appreciate based on that same percentage.

Fact: Value increase of a certain property must be determined on a case-by-case basis, factoring in data on comparable properties and other relevant considerations. This is true in fair economic times as well as bad.

Myth: The home's exterior is determinate of the actual price of the house; it is unnecessary to do an interior appraisal.

Fact: To find an accurate price beyond all doubt, an appraiser must inspect the property on a variety of factors based on area, condition, improvements, amenities, and current market trends. There's no real way to get all of this information from simply looking at the property from the exterior.

Myth: Because consumers pay for appraisal reports when applying for loans to purchase or refinance real estate, they legally own their appraisal.

Fact: Unless a lending agency releases its interest in the document, it is legally owned by the lending agency that ordered the appraisal. However, home buyers must be given a copy of the document upon written request, because of the Equal Credit Opportunity Act.

Myth: Consumers need not worry about what is in their report so long as it exceeds the requirements of their lending group.

Fact: It is very important for home buyers to go through a copy of their appraisal report so that they can double-check the accuracy of the document, in case it's required to question its veracity. Remember, this is probably the most expensive and important investment a consumer will ever make. An report can double as a record for the future, containing a great deal of information - 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.