FAQs
We understand that homeowners in the southwest Chicago suburbs often have questions about residential property appraisals. This page is designed to address common inquiries and provide you with clear, concise information about our services and the appraisal process. Whether you’re considering selling your home, refinancing your mortgage, or simply curious about your property’s value, we hope these FAQs will help you better understand what to expect when working with our team. Our goal is to make the appraisal process as straightforward and transparent as possible for homeowners like you. If you don’t find the answer you’re looking for, please don’t hesitate to contact us directly – we’re always here to help our neighbors in the southwest Chicago suburbs.
Illinois describes an appraisal as the act or process of developing an opinion of value; an opinion of value (adjective) of or pertaining to appraising and related functions, such as appraisal practice or appraisal services. Under Illinois law (225 ILCS 458/5-5) only a licensed appraiser, assessment officer, or other officially authorized person can provide such services.
Scope of work is a description of what is to be completed or not completed as part of any assignment. This might include: the extent of research, sources used for data, tables and calculations used in development, or supporting documents such as maps, photographs or sketches. Each appraisal has a unique scope of work that begins with its purpose and intended use. By law we must determine the scope of work based on what our customers intend to use the report for. A report that provides a “Fair Market Value” estimate for submission to the IRS will be very different than one made for a person deciding how much to sell their town home for. Make sure you are clear about what decision(s) will be made based on the appraisal results and describe any unique situations so the appraiser can determine an appropriate scope of work. Suburban Value will always consult with you on any assignment to ensure that you get an appropriate report that is fully compliant with all applicable laws, rules and guidelines.
Under Illinois law (225 ILCS 454/10-45) BPO and CMA reports can only be made for the marketing or potential marketing of real estate interests, or as an additional opinion in mortgage origination.
- There are no required standards or ethical requirements codified for BPO or CMA development; therefore, these have very limited accountability to regulations.
- They can be developed using any method, with data and opinion from any source, regardless of verification or bias.
- There is no requirement to be uninfluenced by contingent fees, commissions, or beneficial business arrangements.
These sources use what is generally referred to as an Automated Valuation Model (AVM). An AVM is a mathematical tool that delivers a probable price calculation often inferred to be a opinion. An appraisal is a process where a person arrives at a value opinion by applying his or her judgment and experience to all aspects of research & development. An appraisal is defined as an opinion of value, which is distinctly different from a calculation. An AVM uses automated processes and cannot produce an opinion of value because only individuals can exercise judgment and form opinions.
A few Key Differences:
- IL law requires an appraiser to identify the relevant features affecting value when developing their opinion. No licensed local experts of any kind are involved in development of the automated algorithms used by these services so no judgment is made regarding what features may or may not affect value in a particular market.
- An appraiser will identify, compare and rate subjective factors such as location, condition & quality when developing their opinion. No licensed local experts of any kind are involved in development of the algorithms used by these automated services so they make no consideration or adjustment for these factors.
- An appraiser is a local research expert that is required by law to verify information and make judgments about conflicting data. No licensed local experts of any kind are involved in selecting or verifying data used in the development of the mathematical models produced by these automated services.
- An appraiser is required by law to disclose their scope of work and make multiple certifications about the process and their objectivity. Every aspect of the appraisal process is regulated buy rule and law to promote transparency and ensure public trust. Instant value services like Zillow, Trulia and Redfin continue to be immune from law and accountability for the calculations they provide in Illinois and other states. See dismissed US District Court case No. 17-CV-4008. They continually market and imply that their calculations are legitimate estimates of value that can be used in place of long established valuation methods.
Key differences are:
- Mass-marketed AVM reports do not comply any state valuation laws, rules, or ethical requirements.
- They make no expert judgment about any aspect of the data they collect, its accuracy, or even its relevance to your particular home and market.
- These products often lack basic information on home features and do not take into account potentially important factors such as differences in location, views, physical appearance, condition, quality, or basement finishing.
Appraisal fees are estimated based the valuers anticipated scope of work as well as administrative and overhead costs. For a self employed independent contractor, which is most appraisers, this includes things like: time spent driving, viewing homes and neighborhoods, completing research, typing reports, and follow-up/consulting time, as well as health insurance, quarterly income taxes (paid up front), an unemployment fund (self-employed people are ineligible for federal or state unemployment or workman’s comp), business insurance, vehicle and equipment replacement funds, fuel and maintenance, file storage, membership dues, licensing fees and continuing education courses. Valuing unique homes or those with unique locations or views often doubles time and research requirements. Unlike salaried professions appraisers must survive seasonal and market based fluctuations and random “slow spells” that can severely limit the amount of work available any week, month or year.
For detached single family homes, most appraisers use Gross Living Area (GLA) as described by FNMA and FHLMC in their Selling Guide B4-1. This is similar to the ANSI standard for measuring (Z765) but allows less precise rounding and departure from the standard if required for consistency. Reasons for departure from this standard may include situations where or where local builders, public records or sales people use a different standard. These situations are rare and are most commonly an issue with split-level homes, hillside homes, or homes that have large two-story ceiling areas and/or foyers. A diligent appraiser is always on the lookout for inconsistencies between brokers’ estimates, public records, and builders’ estimates that may not be measured to the same standard and to ensure that these variations do not affect the reliability of the appraisal. In the area we services tax assessment offices can be inconsistent with their measuring standards as they do not always have recent information, do not have the opportunity to view the inside of homes, or used poorly trained or inexperienced assistants. They often measure second-floor area, garage area, basement area, or porches incorrectly or guess at their size.
Under the measuring standard mentioned previously, below-grade living area is calculated separately from above-grade living area. This does not mean that appraisers are not attributing value to finished basements, but are considering them as a separate feature. Just as the cost to build these two areas is often significantly different, their current market value may also be significantly different. Separating them in an analysis helps identify the relevance and dollar value of this difference. Combining the size of these areas, as many real estate agents and brokers are now doing, not only misrepresents the home, but also can result in low value estimates throughout that market area if not identified and corrected.
We never share your contact information, confidential data about your home or situation, or our value conclusion, with any person, agent, attorney, company or government agency without your permission, and we do not send promotions or advertisements.