Omni Appraisals has answers to "Frequently Asked Questions"

Omni Appraisals is always ready to talk to you about any inquiries you might have about appraisals in Hoffman Estates and Cook County. Don't hesitate to contact us today.

Define the term "Appraisal"
Describe what an appraiser does
What are the reasons I would request a real estate appraisal?
Is an appraisal the same as a home inspection?
Is an appraisal the same as a comparative market analysis(CMA)?
What are the contents of an appraisal report?
After completing the report, what assurance is there that the value indicated is legitimate?
How difficult is it to become certified?
Who hires Omni Appraisals
Where does Omni Appraisals get the data used to estimate values in Cook County or other areas?
How can a licensed appraiser help me?
What exactly is PMI and how can I get rid of it?
Should I do anything in advance of the appraisal inspection
Define "Market Value"
Who actually owns the appraisal report?
Are some home improvements more worthwhile than others?



Define the term "Appraisal"   (Top)

An appraisal is an evaluation leading to an opinion of value. The real estate appraiser will typically 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 restore the improvements to the home, minus depreciation and physical deterioration, plus the land value. Easily the most common approach in figuring the likely sales price of a house is the Sales Comparison Approach which deals with making a comparison to similar homes close by. Usually, the Sales Comparison Approach is the most definite indicator of market value of a residential property. The Income Approach is primarily used for determining the market value of income-producing properties based on what an investor would pay based on the amount of income a property would bring in.

Describe what an appraiser does   (Top)

An appraiser generates a fair and credible opinion of market value, in the support of real property exchanges. Appraisers reveal the details of their professional conclusions in appraisal reports.


What are the reasons I would request a real estate appraisal?   (Top)

There are a lot of reasons to purchase an appraisal with the usual reason being real estate and mortgage transactions. Some other reasons for purchasing an report include:
  • To get a loan.
  • If you would like to lower your property tax burden.
  • To help a homeowner realize if they owe less than 80% of their home's value and remove PMI.
  • To fight improperly assessed property taxes.
  • If you need to settle an estate.
  • To provide you an edge when purchasing real estate.
  • To find the most probable property value when selling real estate.
  • To ensure parties are provided just compensation in eminient domain cases.
  • Government agencies such as the IRS need an appraisal on every house.
  • It's possible you could have to deal with being in a lawsuit - an appraisal will help.
Click here for a more detailed explanation of the process about getting an appraisal.


Is an appraisal the same as a home inspection?   (Top)

The appraiser is not a home inspector and does not do a full home inspection. A third-party home inspector will inspect the structure of the house, from the top to the foundation. Commonly, a home inspection report will evaluate the amenities and the necessities of the house: air conditioning (weather permitting), electrical functions, the condition of the heating system, the plumbing; then the structural capacity of the home such as the attic, exposed insulation, walls, floors, ceilings, windows, then the foundation, basement and visible structures.

Is an appraisal the same as a comparative market analysis(CMA)?   (Top)

Simply, they share nothing in common. What the CMA depends on are superficial trends. An appraisal is based on comparable sales that can be proven by public record. Area and building prices are also important in an appraisal. The CMA will provide a non-specific figure. An appraisal delivers a defensible and carefully documented opinion of value.

The credentials of the person creating the report is hands down the most significant difference between a CMA and an appraisal. A CMA is written by a real estate agent who may or may not be trained in technical valuation concepts or even have a handle on market trends. 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 accept a previously agreed upon fee for assignments, regardless of their value conclusion.

What are the contents of an appraisal report?   (Top)

The main purpose of an appraisal document is to give a value opinion, and depending on the scope of the report, you'll usually see the following:
  • The client and whose purposes the appraisal is to serve.
  • The intended use of the appraisal.
  • The reason for the assignment.
  • Precisely what "value" attribute is being reported and what that value means.
  • The effective date of the appraiser's opinions and conclusions.
  • Characteristics of the property that have a bearing on the value, including: location, physical attributes, legal attributes, economic factors, the property rights in question, and non-real estate items included in the valuation, such as personal property, trade fixtures and even intangible items.
  • All known easements, restrictions, encumbrances, leases, reservations, covenants, contracts, declarations, special assessments, ordinances, and the like.
  • Division of interest, such as fractional interest, physical segment and partial holding.
  • What was involved in the process of completing the job.
For a more detailed view of what goes into an appraisal report click here: Sample Appraisal Report

After completing the report, what assurance is there that the value indicated is legitimate?   (Top)

In communicating an appraisal report, each appraiser must see to it that each of the items below are covered:
  • That the information analysis implemented in the appraisal was proper.

  • That grave errors of omission or commission were not committed individually or collectively.

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

  • The final appraisal report was clear, sound and defensible.
To become a state licensed appraiser, there are extensive education requirements as well as experience that must be logged - all with the objective of gaining the skills required to render unbiased value opinions. In addition, appraisers must stick to a meticulous industry code of ethics and observe national standards of practice for real estate appraisal. The rules for developing an appraisal and reporting its results are insured by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).


    (Top) Regulations regarding licensing and certification are different from state to state. In general, licensing and certification is commonly associated with many hours of coursework, tests and experience working under a supervisor. Once licensed, he or she is required to take continuing education courses so that the license doesn't expire. To see the specific requirements for any state click here.

Who hires Omni Appraisals   (Top)

Typically, appraisers are called upon by lenders to estimate the value of property involved in a loan transaction. Attorneys and CPAs also hire appraisers for divorce and estate settlements.

Where does Omni Appraisals get the data used to estimate values in Cook County or other areas?   (Top)

One of the primary activities of an appraiser is to gather property data. Data can be split into Specific or General. Specific data is gathered from the property itself; Location, condition, amenities, size and other specifics are gathered by the appraiser during an inspection.

General data is received from a variety of sources. Local Multiple Listing Services (MLS) have information on recently sold homes that might be used as comparables. To double-check actual sales prices, we look at tax records and other public documents. Appraisers routinely have to report when a property is in a flood zone, and that information is retrieved from a FEMA data outlet such as a la mode's InterFlood service.

And last but not least, the appraiser assimilates general data from his or her past experience in doing assignments for other houses in the same market.

How can a licensed appraiser help me?   (Top)

If you're involved in some sort of financial decision and the value of your home matters, you'll want a full appraisal. If you're selling your house, an appraisal helps you set the most appropriate price. When buying, you can avoid overpaying by commissioning an independent appraisal. For parties settling an estate or divorce, an appraisal from Omni Appraisals is the best documentation to ensure assets are split up 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.

What exactly is PMI and how can I get rid of it?   (Top)

PMI is the common abbreviation for for Private Mortgage Insurance. This supplementary plan covers the lender in the event a borrower doesn't pay on the loan and the value of the house is lower than the balance of the loan. Once you reach the point where your home's equity plus the amount you've paid is at least 20% of your loan balance, you can have your PMI dropped.

Does your monthly mortgage payment have a lineitem for PMI?Call Omni Appraisals today at 847-963-6123 or send us an e-mail. Documentation of your home's present value could save you thousands.

Should I do anything in advance of the appraisal inspection   (Top)

The first step in most appraisals is the home 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 amenities. The best thing you can do to help is make sure we have 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. On the inside, make sure we can easily access appliances like furnaces and water heaters.

You can make things go faster and improve the accuracy of the appraisal report by having the following things on hand:
  • 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.
  • Title policy that describes encroachments or easements.
  • Any inspection reports, or other recent reports for termites, EIFS (synthetic stucco) wall systems, septic systems and wells.
  • A list of "suggested" improvements if the property is to be appraised "as complete".

Define "Market Value"   (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?   (Top)

For mortgage transactions, the lender requests 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 certainly entitled to a copy of the appraisal - it's usually bundled with all the other closing documents - but is not entitled to use the report for any other purpose without permission from the lender.

The exception to this rule is when a home owner hires 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 stated otherwise, the home owner can do whatever they want with the appraisal.

Are some home improvements more worthwhile than others?   (Top)

Like all things real estate, this is dependent on a home's location. 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 best ROI from renovating a home comes in the kitchen. 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 weren't far behind, returning 85%. Adding bedrooms and baths can also help the value of your home as long as your home doesn't then become atypical for your neighborhood in terms of size.