Myth: Assessed value should always equate market value.
Reality: It might be that Ohio, like most states, validates the common myth that the assessed value equals the market value; however, this is sometimes the exception rather than the rule.
Examples include when interior remodeling has occurred and the assessor has not seen the improvements, or when homes in the vicinity have not been reassessed for an extended time.
Myth: The buyer or the seller can have leverage in the cost of the property depending upon for whom the appraiser is working.
Reality: There is no vested interest on the part of the appraiser in the result of the analysis, therefore he will complete his work with impartiality and independence, regardless of for whom the appraisal is conducted.
Myth: Market value should be the same as replacement cost.
Reality: The way market value is found is based on what a home buyer would likely pay a willing seller for a property without being under pressure from any outside group to buy or sell.
The dollar amount required to reconstruct a property is what forms the replacement cost.
Myth: Certain formulae, like the price per square foot of the property, are what appraisers use to come to the value of a home.
Reality: There are many varied ways that an appraiser will use to make a comprehensive investigation of every factor in consideration of the property, such as the size, location, condition, how close it is to certain facilities and the sales prices of recently sold comparable houses.
Myth: When the economy is strong and the sales prices of properties are reported to be increasing by a certain percentage, the other houses in the proximity can be expected to appreciate based on that same percentage.
Reality: An increase in value of a certain house has to be concluded on a case-by-case basis, factoring in data on comparable homes and other relevant elements.
It makes no difference whether the economy is good or bad.
Myth: The house's outside is determinate of the actual value of the house; there is no need to do an interior appraisal.
Reality: There are a multitude of different variables that conclude the value of a house; these factors include area, condition, improvements, amenities, and market trends.
There's no possible way to get all of this data from simply examining the property from the exterior.
Myth: Considering that the consumer is the one who provides the funding to pay for the appraisal report when applying for a loan for any real estate transaction, by law the appraisal belongs to them.
Reality: The appraisal is, in fact, legally owned by the lender - unless the lender "relinquishes its interest" in the document.
Consumers have to be supplied with a copy of the appraisal report upon written request as per the Equal Credit Opportunity Act.
Myth: It doesn't matter to consumers what's in the report so long as it meets the necessities of their lending agency.
Reality: Only when consumers examine a copy of their appraisal report can they ensure its accuracy and know if they should ask questions. Remember, this is probably the most expensive and important investment a consumer will ever make.
Also, the appraisal makes an excellent record for future reference, containing helpful and often-revealing information - including 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.
Myth: Appraisers are hired only to assess home values in property sales involving mortgage-lending deals.
Reality: Depending upon their qualifications and designations, appraisers can and will perform a lot of different services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: A home inspection serves the same purpose as an appraisal.
Reality: Appraisal reports are completely different than a home inspection.
The function of an appraisal is to form an opinion of market value during the appraisal process and the completion of the report.
A home inspector assesses the condition of the property and its major components and reports their findings.