UNDERSTANDING THE APPRAISAL PROCESS
Q & A WITH THE APPRAISER
BEFORE THE APPRAISAL INSPECTION
Why is a real estate appraisal necessary?
What does a real estate appraiser do?
For whom does the appraiser work?
Who hires the appraiser?
If I paid a loan application fee, does the appraiser
work for me?
Are appraisers licensed, certified, and/or bonded?
THE APPRAISAL INSPECTION
How long does an appraisal take?
What does the appraiser consider in estimating the
value of my property?
Does the appraiser do a whole house inspection?
What should I tell the appraiser about the property?
Must I walk the appraiser through the house to point
out improvements I have made?
AFTER THE APPRAISAL INSPECTION
What's my property worth?
What affects the value of my property?
If the appraiser is not from my area how can he/she properly
value my property?
Do I get a copy of the appraisal?
Whom do I call if I have a complaint about the appraiser?
BEFORE THE APPRAISAL INSPECTION
Why is a real estate appraisal necessary?
Usually the appraisal is part of
a loan package where real estate is being used as collateral or security
for a loan. The lender needs an accurate, unbiased estimate of value,
which can be used in the loan application process.
What does a real estate appraiser do?
A real estate appraiser estimates
values of real property (land, houses, buildings, etc.), not personal
property (cars, jewelry, boats). The appraiser observes the physical
characteristics of the property to be appraised and estimates value
based upon three common approaches to value (1) Sales Comparison approach
(2) Cost approach (3) Income approach. Call us if you would like a detailed
brochure describing these approaches.
For whom does the appraiser work?
The appraiser usually works for
an appraisal firm; sometimes s/he is self employed. The appraisers at
R C Wessel Associates, Limited are independent contractors. The appraisal
firm is usually not affiliated with the lending institution.
Who hires the appraiser?
The appraiser is hired by the Client,
who can be a lending institution or an individual. The appraiser is
working on behalf of the Client and no one else.
If I paid a loan application fee, does the
appraiser work for me ?
This is a common misunderstanding. The appraiser works
for the Client. The borrower and/or purchaser generally is the customer
but may be the Client - it really hinges on WHO ordered the appraisal.
As a professional the appraiser needs to extend courtesy and respect
to the customer. However, the appraiser is not employed in any way by
the borrower or anyone else besides the Client and cannot discuss specifics
of the appraisal with anyone but the Client (who is generally the Lender
but may be an individual).
Are appraisers licensed, certified, and/or
bonded?
Appraisers in Illinois may be licensed/certified
by the Illinois Office of Banks and Real Estate. In Illinois, certified
appraisers have experience requirements while licensed appraisers do
not. An appraiser must meet specific criteria in order to be certified.
R C Wessel Associates, Limited engages only certified appraisers...
other firms may utilize trainees (licensed appraisers with NO EXPERIENCE
required by licensing agency) -- if you're not sure, ask.
Appraisers do not need to be bonded.
The appraiser does not handle cash or valuables and therefore bonding
does not apply. R C Wessel Associates, Limited does carry liability
insurance to cover accidental damage.
THE APPRAISAL INSPECTION
How long does an appraisal take?
The physical inspection of a typical property usually
takes between fifteen to forty minutes. Sometimes an inspection can
take longer if the house is difficult to measure or has some unique
features that require additional investigation by the appraiser.
After the initial inspection of the property the appraiser
spends time touring through the neighborhood or area. The purpose of this
tour is to search for other properties that are similar to your property
that have sold within the past year. When the field work is finished,
the appraiser completes the report at his office. The report usually is
about fourteen (14) pages long and has taken over six hours to complete.
What does the appraiser consider in estimating
the value of my property?
The appraiser measures the house from the outside to
determine square footage. This external measurement is standard throughout
the industry. Usually no interior measurements are required (except
in the case of condominiums). The appraiser takes notes concerning the
features of your house such as room layout, number of bedrooms, baths,
etc. The appraiser also observes the general condition, appeal, and
functional layout of your house. All of these items are taken into consideration
in the appraisal report.
Does the appraiser do a whole house inspection
?
No. The appraiser is not a whole house inspector, engineer,
architect, electrician, plumber, HVAC technician or contractor. The
appraiser briefly walks through the house to get an idea of the general
condition, quality of finish, and room count. An appraisal is not a
guarantee of condition. You are encouraged to seek the advice of experts
if you have any questions about mechanical systems.
What should I tell the appraiser about the
property ?
To help the appraiser complete the assignment; the owner,
purchaser, or Realtor can provide information that is helpful to the
appraiser. Advise the appraiser of any previous sale on the property
within the last 12 months. Indicate any pending contract or lease on
the property.
Does the property have any rights-of-way or other easements?
Is there structural damage, or water leakage in the house. Is the property
in a flood zone? Basically, inform the appraiser about any hidden features
or detriments to the property which may not be apparent.
Must I walk the appraiser through the house
to point out improvements I have made ?
Usually, the improvements and features of the property
are readily evident to the appraiser. It is not necessary to follow
the appraiser around pointing out each detail of the property. We do
not discourage you from walking through the property with the appraiser,
especially if it makes you more comfortable... it just isn't necessary.
If you think there might be a feature of the property that is not readily
evident please mention it to the appraiser.
AFTER THE APPRAISAL INSPECTION
What's my property worth?
It is common for the owner to ask
the appraiser this question as soon as the appraiser has inspected the
property. The truth is at that time the appraiser doesn't know
what the property is worth. The inspection is the first step of many
the appraiser must go through before a value is estimated. Also, remember
that the appraiser is working for a Client (who may not be you!) and
cannot divulge any information concerning value to anyone but the Client.
What affects the value of my property?
The sales of similar properties
in your area directly affect the value of your property. Items that
usually contribute greatly to value are room additions such as bedrooms,
bathrooms, garages, and desirable decorating. Items that may contribute
very little to value are swimming pools, new plumbing or electric, new
roofs, new furnaces, etc..
If the appraiser is not from my area how can he/she
properly value my property?
Certainly an appraiser should be
familiar with the specifics of an area or neighborhood to value a property.
The misconception is that only someone who lives "close by" would know
the area. At R C Wessel Associates, Limited we appraise in ten counties,
our appraisers have completed thousands of appraisals. We have appraised
in almost all neighborhoods in our service area. Centrally located,
R C Wessel Associates, Limited services a large area and we maintain
comprehensive data on all areas in which we appraise. If you have questions
about an appraiser's expertise in your area simply ask them what sources
of data they use and if they or their firm has appraised in your area.
Do I get a copy of the appraisal?
Yes, if you are the client. If
you are a borrower and the appraisal is used in granting credit you
may be entitled to a copy of the report. This copy may be obtained from
the lending institution by written request. A copy may be given as part
of the fair credit guidelines and may not be relied upon by the borrower.
The report will have specific terms and limiting conditions posted.
It is essential anyone viewing an appraisal report read these conditions.
Whom do I call if I have a complaint about the appraiser?
Of course we expect our appraisers
to always act in a professional manner; if you are unsatisfied with
our service call us. R C Wessel Associates, Limited (708) 352-2990 in
La Grange. Speak to Robert Wessel. You can also contact your lender.
Remember that we work for the client and cannot directly speak to
you concerning the appraisal report or value (unless, of course, you
are the client).
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