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Warren Group, Inc. has answers to "Frequently Asked Questions"

Warren Group, Inc. is ready to address any inquiries you might have about appraisals in Dupage County. Don't hesitate to contact us today.

Describe an appraisal
What does an appraiser do?
What are the reasons I would require services from Warren Group, Inc.?
How is an appraiser different than a home inspector?
My agent performed a CMA for me. Is that the same as an appraisal?
What can I expect to see in my appraisal report?
Upon completion of the appraisal, what assurance is there that the final number is veritable?
What are the requirements to be a certified appraiser?
Who are an appraiser's customers?
Where does Warren Group, Inc. get the information used to estimate values in Dupage County or other areas?
Why do I need a professional appraisal?
My mortgage statement has an item on it for PMI? Can I get rid of that?
How do I get ready for the appraiser?
How does an appraiser define "Market Value"?
Who actually owns the appraisal report?
Which home renovations add the most to the price?



Describe an appraisal   (Back to top)

An appraiser provides an estimation that produces an opinion of value. The appraiser must use a number of "approaches," typically three, to draw up the estimation of market value. One of them is the Cost Approach - which is how much it would cost to replace the improvements, minus physical deterioration and other factors, plus the land value. The Sales Comparison Approach deals with searching for similar homes in close proximity and figuring out the value based on making a comparison of those properties to the home being investigated. Usually, the Sales Comparison Approach is the most accurate indicator of market value of a house. The Income Approach is generally used for finding the market value of income-producing properties based on what an investor would pay based on the amount of capital a property would bring in.

What does an appraiser do?   (Back to top)

An appraiser generates an objective and well justified assessment of market value, in the support of real estate transactions. Appraisers show their conclusions in appraisal reports.


What are the reasons I would require services from Warren Group, Inc.?   (Back to top)

There are a lot of reasons to get an appraisal with the usual reason being real estate and mortgage transactions. A few other reasons for ordering an report include:
  • To obtain a loan.
  • If you would like to lower your property tax burden.
  • To build a case for a homeowner's equity and remove Primary Mortgage Insurance.
  • To contest high property taxes.
  • To handle an estate.
  • To give you an edge when purchasing a home.
  • To find an honest sales price when putting your home on the market.
  • To ensure parties are provided just compensation in eminient domain cases.
  • Because a government agency such as the IRS requires it.
  • If you ever find yourself in a lawsuit.
If you need more information about the appraisal process, please click here.


How is an appraiser different than a home inspector?   (Back to top)

The appraiser is not a home inspector and does not do a full home inspection. The purpose of a home inspection is to evaluate the structure of the property from bottom to top. Generally, a home inspection report will evaluate the amenities and the necessities of the house: air conditioning (weather permitting), electrical systems, the condition of the heating system, the plumbing; then the structural integrity of the home such as the attic, accessible insulation, walls, floors, ceilings, windows, then the foundation, basement and visible structures.

My agent performed a CMA for me. Is that the same as an appraisal?   (Back to top)

To be blunt, it's apples and oranges. The CMA relies on indistinct market trends. The appraisal relies on specific definite comparable sales. The appraisal report will also include neighborhood and construction prices. 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.

But the largest differentiator is the person doing the report. 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. The appraisal is created by a licensed, certified professional who makes a living out of valuing properties. Likewise, the agent has a vested interest in the property's selling price - their commission - whereas the appraiser is bound by a code of ethics to collect only a previously agreed upon sum for assignments, regardless of their value conclusion.

What can I expect to see in my appraisal report?   (Back to top)

The main objective of an appraisal document is to let the reader know the value of the real estate in question, and depending on the scope of the report, one will customarily see the following:
  • Who engaged the appraiser and whose purposes the appraisal is to serve.
  • The intended use of the report.
  • The appraisal's purpose.
  • Precisely what "value" attribute is being reported and what that value means.
  • The effective date of the value opinion.
  • Pertinent property characteristics, including: location, physical attributes, legal attributes, economic attributes, the real property interest valued, and non-real estate items included in the appraisal, such as personal property, items that are more or less permanently installed and even intangible considerations.
  • 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.
  • What was entailed in the activity of completing the job.
For a more in depth view of what goes into an appraisal report click here: Sample Appraisal Report


Upon completion of the appraisal, what assurance is there that the final number is veritable?   (Back to top)

In the documentation of an appraisal, each appraiser must make sure of the following:
  • That the information analysis implemented in the appraisal was suitable.

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

  • That appraisal services were delivered in a careful and judicious fashion.

  • That a trustworthy, defensible appraisal report was communicated.
To become a state licensed appraiser, there are extensive education requirements as well as experience that must be attained - all with the end goal of gaining the skills required to provide unbiased value opinions. In addition, appraisers must abide by a meticulous industry code of ethics and observe national standards of practice for real estate appraisal. The rules for developing an appraisal and documenting 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 practical experience. Once an appraiser is licensed, he or she is required to engage in continuing education courses so the license stays current. To see the specific requirements for any state click here.

Who are an appraiser's customers?   (Back to top)

Typically, appraisers are employed 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 Warren Group, Inc. get the information used to estimate values in Dupage County or other areas?   (Back to top)

Compiling data is one of the primary activities of an appraiser. Data can be split into Specific or General. Specific data is from the property itself; Location, condition, amenities, size and other specifics are gathered by the appraiser while on site.

General data is collected from a number of places. Local Multiple Listing Services (MLS) have data on recently sold homes that might be used as comparables. Tax records and other public documents verify actual sales prices in a market. Flood zone data is gathered from FEMA data outlets, such as a la mode's InterFlood product.

And most importantly, the appraiser assimilates general data from his or her past experience in creating appraisals for other houses in the same market.


Why do I need a professional appraisal?   (Back to top)

Any time the value of your home or other real property is being used to make a significant financial decision, an appraisal helps. For those selling a home, you'll want to determine the price that gets you the most profit but doesn't leave your home on the market too long; an appraisal can help with that. When buying, you can avoid overpaying by commissioning an independent appraisal. If you're engaged in an estate settlement or divorce, it ensures that property is divided fairly. Simply put, a house is often the single, largest financial asset anybody owns. Knowing its true value means you can make the right financial decisions.


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. This additional plan takes care of the lender in the event a borrower doesn't pay on the loan and the market price of the home is less than the balance of the loan. Once you can prove the amount you owe on your home is less than 80% of the home's market value, you can make a case to your lender to drop the PMI.

The amount you keep from getting rid of the PMI required when you got your mortgage will make up for the price of the appraisal in no time. Nobody is more qualified than Warren Group, Inc. when it comes to analyzing real estate appreciation in Warrenville and Dupage County. Contact us today.

How do I get ready for the appraiser?   (Back to top)

The first step in most appraisals is the property inspection. 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. Is there anything you can do to help? Yes there is! First, be sure we have easy access to the exterior of the house (gates aren't locked, etc). Trim any bushes and move any items that would get in our way while we measure the structure. On the inside, make sure the appraiser can get to appliances like furnaces and water heaters.

The following items, if available, will help your appraiser to provide a more accurate appraisal in a shorter period of time:
  • A plot plan or survey of the house and land (if available).
  • Information on any written private easements, such as a shared driveway with a neighbor.
  • Most recent real estate tax bill from Dupage and or legal description of the property.
  • A list of any major home improvements and upgrades, the date of their installation and their cost (for example, the addition of Energy efficiency upgrades or roof repairs) and permit confirmation (if available).
  • 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."



Who actually owns the appraisal report?   (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 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.

This rule doesn't apply when a home owner engages an appraiser directly. In these cases, the appraiser may stipulate how the appraisal can be used; for PMI removal, or estate planning or tax challenges, for example. If not stated otherwise, the home owner can do whatever they want with the appraisal.


Which home renovations add the most to the price?   (Back to top)

The answer to this is different depending upon the location of the home. For example, putting in an inline humidifier could be nice in arid regions, but completely useless near the coast!

No matter where you go, however, renovating a kitchen is almost always a safe investment. 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.