Here is some great infomation that will help out buyers when looking in Buffalo Grove or any Lake County Illinois Area. I was featured in Chicago Agent Magazine this month and was lucky enough to get some great answers about appraisals in the Buffalo Grove and Lake County Illinois Market and wanted to share it with everyone.
Q: SHARRON KELLEY CRS,
CDPE, The Sharron Kelley
Team, Coldwell Banker
Buffalo Grove, 847.465.3638,
sharron@northernillinoshomes.com
Q. How has the appraisal process changed
and why are appraisals coming in low?
A: SHERYL ACKERSON, Vice
President of Mortgage
Lending, Guaranteed Rate,
Inc., Skokie Branch, 847.972.5707,
Sheryl.Ackerson@guaranteedrate.com
The prevalence of foreclosures in the
current market is the major reason
for the decline in appraised values. In the past 18 years,
when there was a foreclosure an appraiser would typically
be able to explain that this property was an uncommon
exception to the market. In other words, both appraisers
and lenders ignored this comparable. Now, nothing can
be ignored and short sales and foreclosures are dominating
the marketplace. Not only are appraisers using three
sold comparables, but typically most also will show three
current listings. If one of the new, current listings is a REO
bank-owned property, it is there to serve as an indication
of where the market is going.
In addition, in the past, upgrades or improvements to
a home such as a finished basement or a new state-of-the
art kitchen could easily add $35,000 to $50,000 to a home.
Now upgrades seldom matter. In this manner, every house
is affected.
Q. How do we get buyers to understand the appraisal process
in today’s market?
When working with a potential buyer, we educate them
that an appraisal is an independent, impartial evaluation.
Only facts and figures matter; square footage and above
grade bathroom counts have more to do with determining
the appraised value than if there is a finished basement,
new carpet and custom paint. Additionally — the timeliness
of the sale — the closing date — is a principal,
controlling factor. In today’s market, a comparable sale
over 90 days is old news. In the past, lenders would allow
comparables up to a six month period.
Another issue is the concept of “declining market.”
An appraiser states that a house is in a declining market
or in a market with an oversupply of inventory. In these
instances, some investors are requiring an additional 5
percent down payment. This is happening more in the
high-end market.
If you are looking to buy or sell a home in Buffalo Grove, Vernon Hills, Long Grove or anywhere else in the Lake County Illinois area please contact me, I would love to help you out.
