Appraisal myths & facts

It is required by law that a real estate appraiser must be state-licensed to offer appraisals for federally-related home purchases in Ohio. You are also entitled by law to demand a copy of the completed appraisal from your lender. Contact our professional staff if you have any concerns about the appraisal process.

Myth: The value that is assessed by the appraiser is required to be equivalent to the market value.

Fact: This is not often the case; most states do support the idea that the assessed value is the same as market value, but not always. Examples include when interior reconstruction has occurred and the assessor is unaware of the improvements, or when houses in the vicinity have not been reassessed for an prolonged period of time.

Myth: The buyer or the seller sometimes may have impact in the value of the home depending upon for whom the appraiser is working.

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

Myth: Any time market value is found, it should equal the replacement cost of the house.

Fact: Without any suggestion from any outside parties to purchase or sell, market value is what a willing buyer would pay a willing seller for a specific house. If the property were rebuilt, the dollar amount needed to do so would set the replacement cost.

Myth: There are specific methods that real estate appraisers use to show the cost of a home, like the price per square foot.

Fact: There are many numerous formulae that an appraiser will use to make a comprehensive investigation of every factor pertaining to the house, such as the size, location, condition, how close it is to specific facilities and the worth of recently sold comparable houses.

Myth: As houses appreciate by a specific percentage - in a strong economy - the homes within the same neighborhood are expected to increase by the same amount.

Fact: Worth appreciation of a specific property is always determined on an individualized basis, factoring in data on comparable houses and other relevant elements. It doesn't matter if the economy is doing well or declining.

Myth: The home's outside is determinate of the actual value of the property; there is no need to do an interior appraisal.

Fact: To conclude an accurate price beyond all doubt, an appraiser must examine the home on a variety of factors based on location, condition, improvements, amenities, and current market trends. There's no real way to get all of this information from simply viewing the house from the exterior.

Myth: Since you're the one providing the money for the appraisal report when applying for your loan to buy or refinance your home, you own the ordered appraisal.

Fact: The appraisal report is, in fact, legally owned by the lending company - unless the lender "relinquishes its interest" in the appraisal report. By the Equal Credit Opportunity Act, any home buyer asking for a copy of the document must be provided with it by their lender.

Myth: There's no need for consumers to even worry about what the report contains so long as their lending institution is satisfied.

Fact: A home buyer should definitely look through their appraisal report; there will probably be some questions or some worries with the accuracy of the report that should be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the appraisal makes a near perfect record for future reference, filled with helpful and often-revealing data - 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 proximity.