It is mandated by law that a real estate appraiser be state-licensed to create appraisals for federally-related transactions in Illinois. You are also entitled by law to acquire a copy of the completed report from your lending agency. Contact McMahon, Baldwin & Associates if you have any questions about the appraisal procedure.

McMahon, Baldwin & Associates discusses myths and realities about real estate appraisals and appraisers

Myth: Assessed value should always be equal to market value.
Reality: This usually isn't true; most states do support the suggestion that the assessed value is the same as market value, but not always. Interior remodeling that the assessor has not investigated and a lack of reassessment on nearby homes are perfect examples of why there might be a differential in price.

Myth: Depending on if the appraisal is drawn up for the buyer or the seller, the cost of the property will vary.
Reality: The appraised value of the home does not affect the pay of the appraiser; as a result, the appraiser has no personal interest in the value of the home. Obviously, he will conduct business with impartiality and independence regardless of for whom the appraisal is produced.

Myth: The replacement value of the house is always in line with the market value.
Reality: Without any suggestion from any external parties to purchase or sell, market value is what a willing buyer would pay a willing seller for a specific home. The dollar amount required to rebuild a home is what shows the replacement cost.

Myth: There are certain ways that real estate appraisers use to determine the cost of a house, like the price per square foot.
Reality: An appraisal is an amalgamation of information based on the property's size, location, proximity to undesirable facilities, the condition of the property and the values of recent comparable sales. You can depend on McMahon, Baldwin & Associates's appraisers to be honest in assessing this data.

Myth: In a strong economy - when the values of houses in a given area are reported to be increasing by a certain percentage - the values of individual homes in the proximity can be expected to rise by that same percentage.
Reality: Any value an appraiser derives concerning a certain home is always individualized, based on certain factors pulled from the information of comparable homes and other considerations within the house itself. It makes no difference if the economy is strong or terrible.

Myth: You can generally find what a home is worth simply by looking at the outside.
Reality: There are a number of different variables that show the value of a house; these factors include location, condition, improvements, amenities, and market trends. Obviously, none of these variables can be found just by inspecting the property from the outside.

Myth: Since the consumer is the one who puts up the capital to pay for the appraisal report when applying for a loan for any real estate transaction, by law the appraisal report belongs to them.
Reality: Legally, the appraisal report is owned by the lending company unless the lender releases their interest in the report. Under the Equal Credit Opportunity Act, any consumer asking for a copy of the report must be provided with it by their lending agency.

Myth: It doesn't concern consumers what's in the report so long as it meets the necessities of their lending agency.
Reality: A home buyer should definitely look through their document; there could be some questions or some worries with the accuracy of the analysis that need to be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. There is an incredible amount of information contained in an appraisal that should be useful to the consumer in the future, such as the legal and physical description of the property, square footage measurements, list of comparable properties in the neighborhood, neighborhood description and a narrative of current real-estate activity and/or market trends in the proximity.

Myth: The only reason someone would order an appraisal is if a home needs its value estimated in a lender sales transaction.
Reality: Ordering an appraisal can fulfill a variety of requirements depending on the designations and certifications of the appraiser involved; appraisers can perform a multitude of different services, including benefit/cost analysis, tax assessment, legal dispute resolution, and even estate planning.

Myth: An appraisal is no different than a home inspection.
Reality: Appraisal reports are completely different than a home inspection report. The purpose of an appraisal report is to form an opinion of market value during the appraisal process and the production of the appraisal. A home inspector assesses the condition of the home and its major components and reports their findings.

Contact McMahon, Baldwin & Associates if you have any other questions about appraisers, appraising or real estate in Dupage or Lombard, Illinois.