Jordan-Appraisal has answers to "Frequently Asked Questions"

Jordan-Appraisal is always willing to answer any concerns you might have about appraisals in Champaign and Champaign County. Contact us today to talk about how we can help solve your valuation problems.

Describe an appraisal
What does an appraiser do?
What would cause me to require your services?
Is an appraisal the same as a home inspection?
What is the difference between an appraisal and a comparative market analysis (CMA)?
What can I expect to see in my appraisal report?
Upon completion of the report, what assurance is there that the value indicated is accurate?
What goes into an appraiser's certification?
Who engages the services of appraisers?
Where does Jordan-Appraisal get the data used to estimate values in Champaign County or other areas?
What can a full appraisal do for me?
What exactly is PMI and how can I get rid of it?
Should I do anything in advance of the appraisal appointment
Define "Market Value"
Does the appraisal belong to the bank or the consumer?
I want to get more for my house. Where should I spend money renovating?



Describe an appraisal   (Go to list of  questions)

The method of writing an appraisal report deals with an estimation which leads to an opinion of value. The real estate appraiser must use a number of "approaches," typically three, to arrive at the estimation of market value. One of the processes in use is the Cost Approach, which finds what it would cost to replace the improvements to the home, less the depreciation and physical deterioration, adding the land value. Another of the methods is the Sales Comparison Approach - which concerns discovering a comparable analysis to other similar properties within a close vicinity which have recently sold. Usually, the Sales Comparison Approach is the most accurate indicator of market value of a home. One of the least common approaches in appraising houses is the Income Approach, which is commonly used to figure the value of a property based on what an investor would pay based on the capital produced by the building.

What does an appraiser do?   (Go to list of  questions)

An appraiser forumlates a professional, unbiased opinion of market value, often in the context of a real estate purchase. Appraisers document their analysis in appraisal reports.


What would cause me to require your services?   (Go to list of  questions)

There are many reasons to obtain an appraisal with the usual reason being real estate and mortgage transactions. Other reasons for purchasing an report include:
  • If you are applying for a loan.
  • If you would like to reduce your property tax burden.
  • To show a homeowner has 30% equity and remove insurance.
  • To fight improperly assessed property taxes.
  • If you need to take care of an estate.
  • To provide you an edge when purchasing real estate.
  • To figure out a reasonable property value when putting your home on the market.
  • To ensure parties are provided just compensation in eminient domain cases.
  • Government agencies such as the IRS need an appraisal on every property.
  • It's possible you could have to deal with being in a lawsuit - an appraisal will definitely help.
Click here for a more extensive explanation of the process of getting an appraisal.


Is an appraisal the same as a home inspection?   (Go to list of  questions)

Appraisers do not do complete home inspections and are not home inspectors. The purpose of a home inspection is to investigate the structure of the property from foundation to rooftop. The usual house inspector's report will include an evaluation of the condition of the house's heating systems, central air conditioning system (temperature permitting), interior plumbing and electrical systems, the roof, attic, and visible insulation, walls, ceilings, floors, windows and doors, the foundation, basement, and visible structure.

What is the difference between an appraisal and a comparative market analysis (CMA)?   (Go to list of  questions)

To be honest, they have nothing in common. What the CMA depends on are superficial trends. Appraisals use comparable sales which are valid resources. The appraisal report will also include neighborhood and construction costs. The CMA will provide a non-specific figure. Being a documented and carefully investigated opinion of value, appraisals are defensible and stand up in legal situations.

The credentials of the person creating the report is frankly the most significant difference between a CMA and an appraisal. 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. A certified, Illinois licensed professional who made their livelihood on valuing properties in and around Champaign County creates the appraisal. 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 accept a flat sum for assignments, regardless of their outcome.

What can I expect to see in my appraisal report?   (Go to list of  questions)

The main objective of an appraisal report is to provide a value opinion, and depending on the scope of the report, one will customarily see the following:
  • The client and whose purposes the appraisal is to serve.
  • The intended use of the appraisal.
  • The appraisal's purpose.
  • Precisely what "value" attribute is being reported and what that value means.
  • The effective date of the appraisal.
  • Relevant property attributes, including: location, physical characteristics, legal attributes, economic attributes, the real property interest in question, and non-real estate items included in the appraisal, such as personal property, permanent equipment installations and even intangible considerations.
  • Any 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.
  • The scope of work used while working up the job.
For a more in depth view of the work that goes into an appraisal report click here: Sample Appraisal Report


Upon completion of the report, what assurance is there that the value indicated is accurate?   (Go to list of  questions)

In the documentation of an appraisal, each appraiser must ensure the following:
  • The appraisal contained a suitable analysis of the information.

  • Whether individually or collectively, there were no critical errors contained in the report, nor any material details left out.

  • That appraisal services were not carried out in a careless or negligent manner.

  • That a believable, supportable appraisal report was imparted.
There are rigorous education and practical experience requirements that must be fulfilled in order to become a licensed appraiser in Illinois. In addition, appraisers must abide by a meticulous industry code of ethics and observe national standards of practice for real estate appraisal. The tenets for carrying out an appraisal and documenting its results are guaranteed by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).


   (Go to list of  questions) Licensing and certification is achieved through classroom study, tests and experience working under a supervisory appraiser. Once an appraiser is licensed, he/she must then complete continuing education courses so that the license doesn't expire. To see the specific requirements for any state click here.

Who engages the services of appraisers?   (Go to list of  questions)

Most of the time, appraisers are employed by mortgage lenders to estimate the value of a house involved in a loan transaction. Appraisers also provide opinions in litigation cases, tax matters and investment decisions.

Where does Jordan-Appraisal get the data used to estimate values in Champaign County or other areas?   (Go to list of  questions)

Compiling data is one of the main things an appraiser performs. Data can be classified as either Specific or General. Specific data is taken from the home itself; Location, condition, amenities, size and other specific data are noted by the appraiser while on site.

General data is received from a variety of sources. To find out about recent sales to be used as "comps", an appraiser will typically go to the local Multiple Listing Service. To double-check actual sales prices, we use items in the assessor's office and other public documents that are usually online nowadays. Flood zone data is available from FEMA data outlets, such as a la mode's InterFlood system.

And most importantly, the appraiser assimilates general data from his or her collective knowledge gained from creating appraisals for other properties in the same market.


What can a full appraisal do for me?   (Go to list of  questions)

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 figure out 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. If you're buying, it makes sure you don't overpay. If you're engaged in an estate settlement or divorce, it ensures that property is divided fairly. A house is often the single, largest financial asset anybody owns. Without knowing its real value, wise financial decisions are impossible.


What exactly is PMI and how can I get rid of it?   (Go to list of  questions)

PMI stands for Private Mortgage Insurance. PMI guards the lender in the event a borrower is unable to pay on the loan and the value of the property is lower than what is owed on 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 money you keep from dropping 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 Jordan-Appraisal when it comes to analyzing real estate appreciation in Champaign and Champaign County. Contact us today.

Should I do anything in advance of the appraisal appointment   (Go to list of  questions)

The first step in most appraisals is the property inspection. What this entails is the appraiser, after setting up an appointment, personally going through the home - recording the layout of the rooms, taking photos and documenting the general status of its features. Is there anything you can do to help? Yes there is! First, be sure the appraiser has easy access to the exterior of the house . Trim any shrubs and relocate any items that would get in our way while we measure the structure. Indoors, make sure we can easily access items like furnaces and water heaters.

To help expedite our work plus ensure a more accurate report, try if possible to have the following items:
  • Any information on the purchase of the property for the last three years.
  • Written property agreements, such as a maintenance agreement for a shared driveway.
  • A bill for your most recent real estate taxes which should also contain a legal description of the property.
  • A list of any major home improvements and enhancements, the date of their installation and their cost (for example, the addition of central air conditioning or roof repairs) and permit confirmation (if available).
  • A list of "proposed" improvements if the property is to be appraised "as complete".

Define "Market Value"   (Go to list of  questions)

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."



Does the appraisal belong to the bank or the consumer?   (Go to list of  questions)

For mortgage transactions, the lender orders the appraisal, either directly or through a third party. 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 included with all the other closing documents - but is not entitled 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 scenarios, the appraiser may define the purpose of the appraisal; for PMI removal, or estate planning or tax challenges, for example. If not stipulated otherwise, the home owner can do whatever they want with the appraisal.


I want to get more for my house. Where should I spend money renovating?   (Go to list of  questions)

This really depends on where the home is. For example, while quality appliances are attractive, a $7000 built-in refrigerator won't pay off in a neighborhood of moderately priced homes

As a rule, the most value returned from renovating a home comes in the kitchen. One recent study revealed that putting $20,000 into a kitchen remodel would add about $17,500 to the value of the home - or about an 88% return on investment. Bathrooms were second, returning 85%. On the contrary, something that may not add value would be painting just for the sake of redecorating.