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5 Reasons to Have Your Home Appraised: An Interview with Anne Sullivan of Pearson & Associates, Inc.

By Anne Sullivan

Tell us a little bit about your company and the services you offer.

We are a full service residential appraisal firm covering Chicago and all surrounding counties as well as Southern Wisconsin. We have been in business for over 15 years and provide services to homeowners, mortgage lenders, attorneys, CPA's and municipalities.

What is one of the most common reasons that someone has their house appraised?

Appraisals are conducted for many reasons. These include Mortgage Application, Tax Appeals, Divorce, Estate Planning or settlement, PMI Removal, Bankruptcy, Foreclosure, Buyer Assurance, Pre-Listing for Sale, or simply to obtain a professional current valuation of your home.

When you're buying a home, how can an independent appraisal help you?

When buying or selling a home a professional appraisal is a valuable tool. Your lender will most likely require the property be appraised to determine if the property meets the Loan to Value requirements. This is a requirement that protects their interest in the property.

Buyers often request appraisals as assurance that they are not overpaying for a property or to determine if they are buying it under market value.

Sellers often request appraisals to determine what price to list their property at and make sure that it is not too high or too low. Independent appraisals differ from a Comparative Market Analysis (CMA) developed by a real estate agent because they are much more detailed and is developed by a 3rd party with no interest in listing or selling your home.

Both buyers and sellers can utilize an independent appraisal during negotiations for their home.

How does a home appraisal affect property taxes in your state?

Each taxing body has formulas for determining property tax amounts.

Generally, they are based on their opinion of the market value of your home. If you disagree, you have the right to appeal your taxes. A tax appeal appraisal is a valuable tool in helping your case because it is a professional, independent opinion of the value of your home. If the valuation is lower than the assessors estimate, you have a good chance of obtaining a reduction in taxes.

Tax appeal appraisals have different criteria and reporting requirements so it is important that a homeowner utilize an appraiser with experience in completing these types of reports. An important factor that appraisers verify is the actual square footage of your home. Often, assessors have never been in your home and must estimate the size of your property based on outside measurements. Appraisers will complete a full interior / exterior inspection of your property. The appraisal report will include a sketch of the interior to determine the actual "Gross Living Area". This is a very important process that determines if some areas should not be included in the overall "square footage" such as: open areas over foyers and family rooms, attached garages, and basements. If the assessor has your square footage overstated there is a very good chance you can appeal on that factor alone. Additionally, appraisers will include interior photos of your property to help document its overall quality and condition which can affect its value.

What tips do you have for a homeowner who wants to take out a home equity loan?

A homeowner who is taking out a home equity loan is most like trying to maximize the value estimate of their property. Therefore it is important that your home shows well when the appraiser observes it. So, clean up and remove clutter. Provide a list of improvements and maintenance items, which can be included in the report. This list is added to show that the property has been maintained.

Is there anything that most people don't know about home appraisals that they should know?

Appraisals completed for mortgage lending have guidelines set by the bank. These include comparable distance, and date of sale. Your neighbor may have sold their home just over a year ago; however it most likely would not be used in your appraisal as there are more recent sales available.

Value is primarily based on closed sales. Neighboring homes that are currently "For Sale" will most likely be included but have a minimal impact on your homes valuation until they close.

Lending guidelines have changed how appraisers are assigned. It is important to know that the appraiser has experience in your market area. Be sure to ask questions to determine that they are familiar with the area and ascertain their level of experience.

What's the best way for people to contact you and your company?

Pearson & Associates, Inc.
2601 N Wilshire Lane
Arlington Heights, IL 60004
Telephone: 847-253-1841
Fax: 847.253.1895

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