Accu-Comp Appraisals has answers to "Frequently Asked Questions"


	Accu-Comp Appraisals is ready to talk to you about any inquiries you might have about appraisals in Chicago and Cook County. Don't hesitate to contact us today.

What is an appraisal?
What does an appraiser do?
What would cause me to need a real estate appraisal?
Is an appraisal the same as a home inspection?
Is an appraisal the same as a comparative market analysis(CMA)?
What are the contents of an appraisal report?
Once the appraisal has been completed, what guarantee is there that the value indicated is valid?
What are the requirements to be a certified appraiser?
Who hires Accu-Comp Appraisals
Where does an appraiser get the data used to estimate values in Cook County or other areas?
Why should I hire a licensed appraiser?
My mortgage statement has an item on it for PMI? Can I get rid of that?
Does the appraiser need anything from me in advance?
How does an appraiser define "Market Value"?
Does the appraisal belong to the bank or the consumer?
Are some home improvements more worthwhile than others?

What is an appraisal? (Back to top)

An appraisal report is an estimation that concludes with an opinion of value. The real estate appraiser must use a several "approaches," typically three, to arrive at the estimation of market value. The Cost Approach is one of the methods that appraisers use to find value; it involves discerning what the improvements would cost without physical deterioration, plus the land value. The Sales Comparison Approach involves searching for similar houses in close proximity and figuring out the value based on making a comparison of those houses to the house being appraised. The Sales Comparison Approach is commonly the most definitive and clearest indicator of value for a house. One of the least common approaches in appraising homes is the Income Approach, which is commonly used to determine the value of a property based on what an investor would pay based on the capital produced by the building.

What does an appraiser do? (Back to top)

An appraiser forumlates a fair and credible assessment of market value, to be used in making real estate transactions. Appraisers present their investigation in appraisal reports.

What would cause me to need a real estate appraisal? (Back to top)

There are a lot of reasons to purchase an appraisal with the most common reason being real estate and mortgage transactions. A few other reasons for obtaining an report include:

If you are applying for a loan.
If you would like to lower your property tax obligations.
To demonstrate a homeowner's acquired equity and remove Primary Mortgage Insurance.
To fight improperly assessed property taxes.
If you need to settle an estate.
To offer you a negotiating tool when purchasing a home.
To determine a reasonable sales price when putting your home on the market.
To defend your rights if your property is being taken by means of eminent domain in a condemnation case.
Government agencies such as the IRS need an appraisal on every property.
It's possible you could have to deal with being in a lawsuit - an appraisal will definitely help.

For a more detailed explanation of the appraisal process click here.

Is an appraisal the same as a home inspection? (Back to top)

Appraisers do not do perform home inspections and are not home inspectors. The purpose of a home inspection is to investigate the structure of the home from foundation to attic. The stereotypical property inspector's report will contain an evaluation of the condition of the house's heating systems, central air conditioning system (temperature permitting), interior plumbing and electrical systems, the roof, attic, and accessible insulation, walls, ceilings, floors, windows and doors, the foundation, basement, and visible structure.

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

Simply put, it's like comparing opera to country. The CMA uses market trends to generate most of their business. Appraisals use similar sales which are verifiable resources. In addition, the appraisal checks other factors like condition, area and construction costs. All a CMA does is generate a "ball park figure." Being a documented and carefully investigated opinion of value, appraisals are defensible and stand up in legal situations.

Who's creating the report is hands down the biggest difference between a CMA and an appraisal. Real estate agents write CMA's, and they don't always know the whole market or have specific competence when it comes to home valuation. A certified, Illinois licensed professional who has formed their livelihood on valuing properties in and around Cook County creates the appraisal. Likewise, the agent has something at stake since they get a commission based on the property's selling price - their commission - whereas the appraiser is bound by a code of ethics to accept a flat fee for assignments, regardless of their outcome.

What are the contents of an appraisal report? (Back to top)

The main objective of an appraisal report is to provide a value opinion, and depending on the scope of the report, one will customarily see the following:

Who engaged the appraiser and other intended users.
The intended use of the report.
The reason for the appraisal.
The type of value contained and a definition of that value.
The effective date of the appraisal.(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 characteristics, legal attributes, economic attributes, the property rights valued, and non-real estate items included in the valuation, such as personal property, permanent equipment installations and even intangible items.
All 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.
The scope of work used when completing the assignment.

For a more in depth view of the work that goes into an appraisal report click here: Sample Appraisal Report

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

In communicating an appraisal report, each appraiser must make sure of the following:

That the information analysis contained in the appraisal was suitable.

Whether individually or collectively, there were no crucial errors contained in the appraisal, nor any relevant details left out.

That appraisal services were not executed in a careless or negligent fashion.

The final appraisal report was transparent, legitimate and not easily discredited.

There are intense classroom and on the job experience requirements that must be met in order to get an appraisal license in Illinois. Likewise, appraisers must follow a stringent industry code of ethics and comply with national standards of practice for real estate appraisal. The tenets for developing an appraisal and reporting its results are insured by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).

(Back to top) Licensing and certification takes coursework, tests and real world experience. Once licensed, he/she must then take continuing education courses so that the license doesn't expire. To see the specific requirements for any state click here.

Who hires Accu-Comp Appraisals (Back to top)

Commonly, appraisers are called upon by mortgage lenders to estimate the value of real estate involved in a loan transaction. Appraisers also provide opinions in litigation cases, tax matters and investment decisions.

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

One of the main activities of an appraiser is to collect property data. Data can be categorized as either Specific or General. Specific data is gathered from the property itself; Location, condition, amenities, size and other specifics are noted by the appraiser during an inspection.

General data is received from a many places. Local Multiple Listing Services (MLS) provide data on recently sold homes that could be used as comparables. To verify actual sales prices, we research tax records and other public documents. Flood zone data is retrieved from FEMA data outlets, such as a la mode's InterFlood service.

And last but not least, the appraiser assembles general data from his or her past experience in doing assignments for other properties in the same market.

Why should I hire a licensed appraiser? (Back to top)

If you're making some sort of financial decision and the value of your home is relevant, you'll want an appraisal. For those selling a home, you'll want to determine a 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 those settling an estate or divorce, an appraisal from Accu-Comp Appraisals is the best documentation to ensure assets are divided fairly. Simply put, a house is often the single, largest financial asset anybody owns. Without knowing its real value, wise financial decisions are impossible.

My mortgage statement has an item on it for PMI? Can I get rid of that? (Back to top)

PMI is the common abbreviation for for Private Mortgage Insurance. PMI guards the lender in case a borrower doesn't pay on the loan and the value of the property is lower than what the borrower still owes on the loan. You can have your PMI dropped once you've achieved 20% equity in your home through appreciation and principal payments.


	The savings from cancelling the PMI required when you got your mortgage pays for the appraisal in no time. Accu-Comp Appraisals is a name you can trust when it comes to value trends in Chicago and Cook County. Contact us today.

Does the appraiser need anything from me in advance? (Back to top)

We begin with an inspection of the home. During this process, we 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. The best thing you can do to help is make sure the appraiser has easy access to the exterior of the house . Trim any shrubs and relocate any items that would get in our way while we measure the structure. Indoors, make sure the appraiser can easily access items like furnaces and water heaters.

To help speed things along as well as ensure a more accurate report, try if possible to have the following items:

A plot plan or survey of the house and land (if readily available).
A list of any personal property that will be left behind and sold with the home, such as a oven, or a washer and dryer, if applicable.
A bill for your most recent real estate taxes which should also contain a legal description of the property.
Home inspection reports, or other recent reports for termites, EIFS (synthetic stucco) wall systems, your septic system and wells.
A copy of the current listing agreement and broker's data sheet and Purchase Agreement if a sale is "pending".

How does an appraiser define "Market Value"? (Back 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."

Does the appraisal belong to the bank or the consumer? (Back to top)

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 appraisal - 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.

It's different when it's the homeowner hiring the appraiser for things outside securing a mortgage. In these scenarios, the appraiser may define how the appraisal can be used; 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? (Back to top)

The answer to this is different depending upon the location of the home. 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. According to one national survey, kitchen remodels returned an average of 88% of the investment. In other words, a $10,000 kitchen remodeling project would add approximately $8,800 to the value of the home. Bathrooms were second, yielding 85%. On the contrary, something that may not increase your value would be painting just for the sake of redecorating.