profile picture

Ohio Valley Appraisals has answers to "Frequently Asked Questions"

Ohio Valley Appraisals is always happy to answer any concerns you might have about appraisals in Highland County. Contact us today to learn how we can help solve your valuation problems.

What is an appraisal?
What does an appraiser do?
What would cause me to request your services?
What is the difference between an appraisal and a home inspection?
Is an appraisal the same as a comparative market analysis(CMA)?
What's in an appraisal report?
Once the appraisal has been delivered, what guarantee is there that the value indicated is valid?
What goes into an appraiser's certification?
Who employs appraisers?
Where does an appraiser get the data used to estimate values in Highland County or other areas?
How can a licensed appraiser help me?
What exactly is PMI and how can I get rid of it?
Should I do anything in advance of the appraisal inspection
What does "Market Value" mean?
Who has rights to the appraisal report?
Are some home improvements more worthwhile than others?



What is an appraisal?   (Return to top)

An appraisal is an evaluation leading to an opinion of value. The appraiser will use a several "approaches," typically three, to come to the estimation of market value. One of the processes in use is the Cost Approach, which evaluates what it would cost to restore the improvements to the house, less the age and physical deterioration, plus the land value. Another of the methods is the Sales Comparison Approach - which concerns finding a comparison to other similar properties within a close vicinity which have recently sold. Generally speaking, the Sales Comparison Approach is the most definite indicator of market value of a home. The third approach is the Income Approach, which is of most importance in appraising income producing properties - it deals with estimating what an investor would pay based on the income generated by the property.

What does an appraiser do?   (Return to top)

An appraiser generates an impartial and well substantiated assessment of market value, often in the context of a real estate sale. Appraisers demonstrate their professional analysis in appraisal reports.


What would cause me to request your services?   (Return to top)

There are a lot of reasons to obtain an appraisal from Ohio Valley Appraisals with the usual reason being real estate and mortgage transactions. Other reasons for obtaining an appraisal report include:
  • To receive a loan.
  • To reduce your tax burden.
  • To help a homeowner realize if they owe less than 80% of their home's value and remove insurance.
  • To challenge improperly assessed property taxes.
  • If you need to take care of an estate.
  • To provide you a leg-up when purchasing a home.
  • To determine an honest property value when listing your home.
  • To ensure parties are provided just compensation in eminient domain cases.
  • Because an official agency such as the IRS requires it.
  • If you are ever involved in a civil case.
For a more detailed description of the appraisal process click here.


What is the difference between an appraisal and a home inspection?   (Return to top)

Appraisers do not do perform house inspections and are not home inspectors. An inspection is a third-party investigation of the livable structure and systems of a house, from the roof to the bottom. Generally, a home inspection report will discuss the amenities and the necessities of the house: air conditioning (weather permitting), electrical systems, the condition of the heating system, the plumbing; then the structural integrity of the home such as the attic, exposed insulation, walls, floors, ceilings, windows, then the foundation, basement and other visible structures.

Is an appraisal the same as a comparative market analysis(CMA)?   (Return to top)

Honestly, they have nothing in common. What the CMA relies upon are vague trends. Appraisals use comparable sales which are valid resources. In addition, the appraisal checks other factors like condition, area and building costs. A CMA delivers a "ball park figure." Being a documented and carefully investigated opinion of value, appraisals are defensible and stand up in legal situations.

The credentials of the person behind the report is actually the biggest difference between a CMA and an appraisal. Real estate agents, who may not have a complete understanding of valuation methods or the entire market, generate CMA's. A certified, Ohio licensed professional who bases a career on valuing properties in and around Highland County creates the appraisal. Further, the appraiser is an independent voice, with no conditional interest in the value conclusion, unlike the real estate agent, who gets a commission based upon the price of the home.

What's in an appraisal report?   (Return to top)

Every report should reflect a believable value opinion and must clearly state the following:
  • The client and whose purposes the appraisal is to serve.
  • The intended use of the appraisal.
  • The purpose of the appraisal.
  • The type of value contained and a definition of the value reported.
  • The effective date of the appraiser's opinions and conclusions.(Sometimes this is in the past or maybe the future for new construction!)
  • Characteristics of the property that have a bearing on the value, including: location, physical attributes, legal attributes, economic attributes, the real property interest valued, and non-real estate items included in the appraisal, such as personal property, items that are more or less permanently installed and even intangible considerations.
  • All known easements, restrictions, encumbrances, leases, reservations, covenants, contracts, declarations, special assessments, ordinances, and the like.
  • Division of interest, such as fractional interest, physical segment and partial holding.
  • What was entailed in the process of completing the appraisal.
For a more comprehensive view of all that goes into an appraisal report click here: Sample Appraisal Report


Once the appraisal has been delivered, what guarantee is there that the value indicated is valid?   (Return to top)

In the documentation of an appraisal, each appraiser must ensure the following:
  • The appraisal contained an apropos analysis of the information.

  • That grave errors of omission or commission were not committed individually or collectively.

  • That appraisal services were not carried out in a careless or negligent fashion.

  • The final appraisal report was easy to explain, legitimate and defensible.
To become a state licensed appraiser, there are extensive education requirements as well as real world experience that must be logged. Likewise, appraisers must follow a strict industry code of ethics and respect national standards of practice for real estate appraisal. The rules for working up an appraisal and communicating its results are guaranteed by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).


   (Return to top) Licensing and certification is achieved through coursework, tests and real world experience. Once an appraiser is licensed, he/she must then engage in continuing education courses so the license remains current. To see the specific requirements for any state click here.

Who employs appraisers?   (Return to top)

Mortgage lenders are an appraiser's most likely client, using their services to ensure a home involved in a mortgage transaction is adequate collateral for a loan. Attorneys and CPAs also hire appraisers for asset division and estate settlements.

Where does an appraiser get the data used to estimate values in Highland County or other areas?   (Return to top)

Collecting information is one of the primary tasks an appraiser performs. Data can be classified as either Specific or General. Specific data is taken from the property itself; Location, condition, amenities, size and other specific data are documented by the appraiser during an inspection.

General data is collected from a variety of sources. Local Multiple Listing Services (MLS) have data on recently sold homes that might be used as comparables. To verify actual sales prices, we use items in the assessor's office and other public documents that are usually online nowadays. Appraisers often have to report when a property is in a flood zone, so that information is retrieved from a FEMA data outlet such as a la mode's InterFlood product.

And most importantly, the appraiser assembles general data from his or her collective knowledge gained from creating appraisals for other houses in the same market.


How can a licensed appraiser help me?   (Return to top)

Any time the value of your home or other real property is being used to make a significant financial decision, an appraisal helps. For those selling a home, you'll want to determine the price that gets you the most profit but doesn't leave your home on the market too long; an appraisal can help with that. If you're buying, it makes sure you don't overpay. For people settling an estate or divorce, an appraisal from Ohio Valley Appraisals is the best way to ensure assets are divided fairly. Simply put, a home is often the single, largest financial asset anybody owns. Knowing its true value means you can make wise financial decisions.


What exactly is PMI and how can I get rid of it?   (Return to top)

PMI stands for Private Mortgage Insurance. It covers the lender in the event a borrower defaults on the loan and the value of the home is lower than the loan balance. Once you can prove the amount you owe on your home is less than 80% of the home's market value, you can make a case to your lender to drop the PMI.

The savings from cancelling your PMI will make up for the cost of the appraisal in no time. Nobody is more qualified than Ohio Valley Appraisals when it comes to analyzing real estate appreciation in Greenfield and Highland County. Contact us today.

Should I do anything in advance of the appraisal inspection   (Return to top)

The first step in most appraisals is the property inspection. During this process, the appraiser will come to your home and measure it, determine the layout of the rooms inside, confirm all aspects of the home's general condition, and take several photos of your house for inclusion in the report. On the home's interior, make sure it is clutter free and that we can get to things like furnaces and water heaters. On the outside, trim any bushes so we can be free to get an accurate measurement of exterior walls.

To help speed things along plus ensure a more accurate report, attempt if possible to have the following items:
  • Information on any written private easements, such as a shared driveway with a neighbor.
  • Title policy that lists encroachments or easements.
  • Information on "Homeowners Associations" or condominium covenants and fees.
  • A list of any major home improvements and upgrades, the date of their installation and their cost (for example, the addition of Energy efficiency upgrades or roof repairs) and permit confirmation (if available).
  • Most recent real estate tax bill and or legal description of the property.

What does "Market Value" mean?   (Return to top)

In real estate appraising, Market Value is commonly defined as:

"The most probable price (in terms of money) which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably, and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby: the buyer and seller are typically motivated; both parties are well informed or well advised, and acting in what they consider their best interests; a reasonable time is allowed for exposure in the open market; payment is made in terms of cash in United States dollars or in terms of financial arrangements comparable thereto; and the price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale."



Who has rights to the appraisal report?   (Return to top)

For mortgage transactions, the lender requests the appraisal, either directly or through a third party. Even though it's the buyer that eventually pays for the report, the lender is the intended user. The buyer is entitled to a copy of the appraisal - it's usually bundled with all the other closing documents - but is not entitled to use the report for any other purpose without permission from the lender.

This rule doesn't apply when a home owner hires an appraiser directly. In these cases, the appraiser may define the purpose of the appraisal; for PMI removal, or estate planning or tax challenges, for example. If not stipulated otherwise, the home owner can do whatever they want with the appraisal.


Are some home improvements more worthwhile than others?   (Return to top)

The answer to this is different depending upon the location of the home. For example, installing an inline humidifier could be nice in arid regions, but completely useless near the coast!

No matter where you go, however, renovating a kitchen is almost always a safe move. One recent study revealed that putting $20,000 into a kitchen remodel would add about $17,500 to the value of the home - or about an 88% return on investment. Bathrooms are right up there with kitchens, returning 85%. Adding bedrooms and baths can also help the value of your home (when done well) as long as your home doesn't then become an oddball for your neighborhood in terms of size.