Ohio appraisals
An appraisal is done as part of the loan approval process. Appraisals is purchased or refinanced and it is done by a professional appraiser. The appraisal estimates the amount of money the property is worth and takes several factors into consideration. Mortgage lenders often look for the “fair market value” of the property, which is the amount of money the property could sell for in a competitive market. The appraised value is often different than the asking price or sale price of the property and the market value of the property can change over time depending on the market
Appraisers commonly use two approaches when establishing the value of a residential property:
Sales Comparison Approach: In this approach the appraiser identifies 3-4 comparable properties in the neighborhood which have recently been sold. Ideally, the properties are within ½ mile all the way up to 5 miles or more that have sold within the last 180 days. The home will be of a similar nature in size, rooms, and layout. The appraiser then compares the sold properties to the subject property. The factors used in the comparison include square footage, number of bedrooms and bathrooms, property age, lot size, view, and the condition of the property. This is the most common approach used in appraising residential or home properties.
Income Approach: In this approach the potential net income of the property is capitalized to arrive at a value. This approach is suited to income-producing properties and is usually used in conjunction with other valuation methods. The process of converting a future income stream into a present value is known as capitalization. This is typically used with income or commercial properties.
The Home Valuation Code of Conduct (HVCC)
As of May 9th, 2009 Lenders are required to order appraisals in compliance with the HVCC. For more information on the HVCC, visit: Fannie Mae (HVCC and Frequently Asked Questions)
If you have any questions about appraisals, please contact me .
