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A-Appraisals has answers to "Frequently Asked Questions"

A-Appraisals is prepared to reply to any questions you might have about appraisals in Lake County. Don't hesitate to contact us today.

What is an appraisal?
What does an appraiser do?
What are the reasons I would request your services?
How is an appraiser different than a home inspector?
My agent performed a CMA for me. Is that the same as an appraisal?
What are the contents of an appraisal report?
Once the assignment is done, what assurance is there that the value conclusion is valid?
How are appraisers certified?
Who are an appraiser's customers?
Where does an appraiser get the information used to estimate values in Lake County or other areas?
How can a licensed appraiser help me?
What exactly is PMI and how can I get rid of it?
Does the appraiser need anything from the homeowner in advance?
Define "Market Value"
Does the appraisal belong to the bank or the consumer?
Which home renovations add the most to the price?



What is an appraisal?   (Go to list of  questions)

An appraiser performs an evaluation that generates an opinion of value. The appraiser must use a several "approaches," typically three, to conclude the estimation of market value. One of them is the Cost Approach - which is what it would cost to replace the improvements, minus physical deterioration and other factors, then adding the land value. Another of the methods is the Sales Comparison Approach - which deals with finding a comparison to other similar properties within a close vicinity which have recently sold. The Sales Comparison Approach is normally the most accurate and best indicator of a liklely sales price for a house. The Income Approach is generally used for determining the market value of income-producing properties based on what an investor would pay based on the amount of capital a property produce.

What does an appraiser do?   (Go to list of  questions)

An appraiser forumlates an impartial and well supported assessment of market value, often in the context of a real estate exchange. Appraisers reveal the details of their expert analysis in appraisal reports.


What are the reasons I would request your services?   (Go to list of  questions)

There are many reasons to purchase an appraisal with the most common reason being real estate and mortgage transactions. A few other reasons for obtaining an appraisal include:
  • If you are applying for a loan.
  • If you would like to reduce your property tax burden.
  • To help a homeowner realize if they owe less than 80% of their home's value and remove Primary Mortgage Insurance.
  • To fight inflated property taxes.
  • To settle an estate.
  • To give you an edge when purchasing a home.
  • To figure out a reasonable sales price when putting your home on the market.
  • To ensure parties are provided just compensation in eminient domain cases.
  • Because an official agency such as the IRS requires it.
  • It's possible you could have to deal with being in a lawsuit - an appraisal will help.
If you need a more detailed explanation of the appraisal process, please click here.


How is an appraiser different than a home inspector?   (Go to list of  questions)

Appraisers do not do perform home inspections and are not home inspectors. The point of a home inspection is to evaluate the structure of the house from bottom to top. For the most part, a home inspection report will evaluate the amenities and the necessities of the property: 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, visible insulation, walls, floors, ceilings, windows, then the foundation, basement and visible structures.

My agent performed a CMA for me. Is that the same as an appraisal?   (Go to list of  questions)

To be honest, they share nothing in common. The CMA utilizes market trends to create most of their business. Appraisals use similar sales which are verifiable resources. Location and construction values are also precedent in an appraisal. The CMA will provide a non-specific figure. Delivering a defensible and careful analysis, an appraisal will give a clear opinion of value.

But the most significant factor is who's doing the report. A CMA is written by a real estate agent who may or may not have a true grasp of the market or valuation concepts. A certified, Illinois licensed professional who has formed a career on valuing real estate in and around Lake County is behind the appraisal. Likewise, the agent has a vested interest in the property's selling price - their commission - whereas the appraiser is bound by a code of ethics to accept a flat sum for assignments, regardless of their outcome.

What are the contents of an appraisal report?   (Go to list of  questions)

Each appraisal must reflect a credible value opinion and should document the following:
  • Who engaged the appraiser and other intended users.
  • How the appraisal is supposed to be used.
  • The reason for the appraisal.
  • Precisely what "value" attribute is being reported and what that value means.
  • The effective date of the appraiser's opinions and conclusions.(Sometimes this is in the past or maybe the future for new construction!)
  • Pertinent property characteristics, including: location, physical description, legal attributes, economic factors, the real property interest in question, and non-real estate items included in the valuation, such as personal property, items that are more or less permanently installed and even intangible factors.
  • Any known easements, restrictions, encumbrances, leases, reservations, covenants, contracts, declarations, special assessments, ordinances, and other items of a similar nature.
  • Division of interest, such as fractional interest, physical segment and partial holding.
  • What was entailed in the activity of completing the job.
For a more in depth view of all that goes into an appraisal report click here: Sample Appraisal Report


Once the assignment is done, what assurance is there that the value conclusion is valid?   (Go to list of  questions)

In communicating an appraisal report, each appraiser must ensure the following:
  • The appraisal contained an appropriate analysis of the information.

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

  • That appraisal services were delivered in a careful and judicious manner.

  • That a credible, substantiated appraisal report was imparted.
There are intense education and practical experience requirements that must be met in order to get an appraisal license in Illinois. Likewise, appraisers must stick to a stringent industry code of ethics and comply with national standards of practice for real estate appraisal. The guidelines for working up an appraisal and communicating its results are guaranteed by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).


   (Go to list of  questions) Licensing and certification is achieved through coursework, tests and experience working under a supervisor. Once licensed, he or she is required to take continuing education courses so the license remains up to date. To see the specific requirements for any state click here.

Who are an appraiser's customers?   (Go to list of  questions)

Mortgage lenders are an appraiser's most likely client, using their services to ensure property involved in a mortgage transaction is enough to cover a loan balance in the case of default. Attorneys and CPAs also hire appraisers for asset division and estate settlements.

Where does an appraiser get the information used to estimate values in Lake County or other areas?   (Go to list of  questions)

Collecting data is one of the main tasks an appraiser engages in. Data can be categorized as either Specific or General. Specific data is collected from the home itself; Location, condition, amenities, size and other specific data are noted by the appraiser during an inspection.

General data is collected from a many sources. To look up recently sold homes to be used as "comps", an appraiser will often use the local Multiple Listing Service. Tax records and other courthouse documents verify actual sales prices in a market. Flood zone data is gathered from FEMA data outlets, such as a la mode's InterFlood service.

And last but not least, the appraiser assimilates general data from his or her collective knowledge gained from doing assignments for other properties in the same market.


How can a licensed appraiser help me?   (Go to list of  questions)

If you're involved in some sort of financial decision and the value of your home matters, you'll want a full appraisal. When selling your house, an appraisal will help you determine the most appropriate price. If you're buying, it makes sure you don't overpay. For people settling an estate or divorce, an appraisal from A-Appraisals is the best way to ensure assets are divided properly. A house is often the single, largest financial asset anybody owns. Without knowing its real value, wise financial decisions are impossible.


What exactly is PMI and how can I get rid of it?   (Go to list of  questions)

PMI is short for for Private Mortgage Insurance. This supplemental policy covers the lender in case a borrower defaults on the loan and the value of the house is lower than the balance of the loan. Once you reach the point where your home's equity plus the amount you've paid is at least 20% of your loan balance, you can have your PMI dropped.

Is PMI a part of your monthly house payment?Call A-Appraisals today at (847) 550-1700 or send us an e-mail. Documentation of your home's present value could save you thousands.

Does the appraiser need anything from the homeowner in advance?   (Go to list of  questions)

We begin with an inspection of the property. 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. Is there anything you can do to help? Yes there is! First, be sure the appraiser has easy access to the exterior of the house . Trim any landscaping and move any items that would make it difficult to measure the structure. On the inside, make sure the appraiser can easily access items like furnaces and water heaters.

You can make the inspection go faster and improve the accuracy of the appraisal report by having the following things on hand:
  • Any information on the purchase of the property for the last three years.
  • Any documents, such as a title policy with information on encroachments or easements encroachments or easements.
  • Information on "Homeowners Associations" or condominium covenants and fees.
  • Locate copies of the current listing agreement, broker's data sheet and, if the sale is "pending", the purchase agreement.
  • A list of "proposed" improvements if the property is to be appraised "as complete".

Define "Market Value"   (Go to list of  questions)

In real estate appraising, Market Value (as opposed to Fair 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."



Does the appraisal belong to the bank or the consumer?   (Go to list of  questions)

In most real estate transactions, the appraisal is ordered by the lender. While the buyer pays for the report as part of the closing costs, the lender retains the right to use the report or any information contained within. The buyer is certainly entitled to a copy of the report - it's usually bundled with all the other closing documents - but is not allowed to use the report for any other purpose without permission from the lender.

The exception to this rule is when a home owner engages an appraiser directly. In these situations, the appraiser may stipulate the purpose of the appraisal; for PMI removal, or estate planning or tax challenges, for example. If not noted otherwise, the home owner can do whatever they want with the appraisal.


Which home renovations add the most to the price?   (Go to list of  questions)

The added value of a particular amenity truly depends on the local market. For example, while quality appliances are attractive, a $7000 built-in refrigerator won't pay off in a neighborhood of moderately priced homes

As a rule, the most value returned from renovating a home comes in the kitchen. 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 weren't far behind, returning 85%. On the contrary, something that may not add value would be painting just for the sake of redecorating.