Sellers and Buyers
The the use of an appraisal by sellers can increase their net sale price by far more than the cost of the service. No instant on-line estimate can identify, verify, compare and make judgments about your homes most valuable features in your particular neighborhood. No prospective or involved sales person can meet the ethics and objectivity requirements that must be certified by an appraiser. An experienced appraiser can also advise on property condition and market condition issues that may affect the homes eligibility for FHA, VA, USDA and FNMA/FHLMC loan programs, preventing problems with last minute repair requirements as well as over-updating and over-repairing. Likewise, for purchasers, getting a well researched and supported value opinion can prevent bad financial decisions and help identify beneficial ones. For those purchasing or selling a rent-to-own, contract for deed or seller financed home an independent appraisal is always wise. For sales between family members property an appraisal is a great way to gain confidence in the fairness of the price or the gift of equity given. Any gift of home equity reported to the IRS must be supported by an appraisal.
Private Mortgage Insurance or PMI is the supplemental insurance that many lenders have to purchase when the amount being loaned is more than 80% of the value of the home (LTV loan to value). This additional payment is often folded into the monthly mortgage payment and is quickly forgotten. After a rise in values and/or payment to principal goes below this 80% level PMI is no longer required. United States Congress passed a law in 1998 (the Homeowners Protection Act of 1998) that requires lenders to remove the PMI payments when the loan-to-value ratio conditions have been met. An appraisal is required to determine the property’s value. The costs of these services are recovered in just a few months of not paying the PMI.
An appraisal report is required to establish Fair Market Value of any real estate left as part of an estate for tax filings, settlement between multiple heirs, and can aid in marketing decisions. We can provide both date of death(retrospective) and current value estimates. Under IL law (
225 ILCS 458/5-5) only licensed appraisers can provide appraisals. Do not attempt to use a real estate sales persons opinion, such as a “CMA report”, as an appraisal in your settlement decisions or any value estimate given to the IRS. Appraisers are held to numerous ethical requirements, such as research and development standards, intended to ensure public trust in our objectivity. Our chief appraiser far exceeds the minimum appraiser requirements for the IRS and state and can provide reports on any 1-4 unit residential property suitable for a variety of estate related purposes.
Divorce, Arbitration and Settlements
In circumstances such as divorce, appraisals are required so that both parties involved can settle based on a fair and impartial value of any real estate. Under IL law (
225 ILCS 458/5-5)only licensed and certified appraisers can provide appraisal services. Do not attempt to use a real estate sales persons opinion, such as a “CMA report”, as an appraisal in your settlement decisions or any value estimate given to the IRS. Appraisers are held to numerous ethical requirements, such as research and development standards, intended to ensure public trust in our objectivity. A second appraisal or appraisal review is recommended if you suspect that another parties appraisal is unreliable or biased, if you have a unique home, or just want a second opinion for a higher degree of confidence.
Property Tax Assessments
Challenging tax assessments has become a necessity in this part of Illinois. Unfortunately, most people go into these challenges unarmed. A real estate sales person may offer to help, but they can not legally provide an appraisal for this purpose. Some try to use mortgage finance appraisals or automated valuations but find them rejected. Only a retrospective appraisal report, from a state approved appraiser completed specifically for tax appeal can meet the requirements of a review board. As of this publication all of our tax appeal appraisals have been accepted, considered, and resulted in sizable reductions from township, county and even state level review boards.
In our service area your assessed value is 1/3rd of the fair market value of your property (as of the the previous year) and usually published between May and September. If your tax rate is around 9%, a reduction by the assessor of even $10,000 in the fair market value used by the assessor may cover the cost of the appraisal the first year and save about $1080 over 4 years. Most tax appeals we have assisted in have resulted in a savings of $400-800 per year, and several recent reductions due to our reports resulted in savings of over $1000 per year. If your suspect that your assessor’s recently published fair market value estimate is at least $10,000-$15,000 over value for the assessment year please call or email for free consultation.
I am adept at valuation in rural and semi-rural areas were data is scarce, advance algorithms may fail, and traditional skills and methods are often more reliable. I have an extensive reference library, and use sound appraisal methodology established by the Appraisal Institute. Initial consulting is free.