Category: Uncategorized

 

Updated Vs Remodeled

Updated: The area of the home has been modified to meet current market expectations. These modifications are limited in terms of both scope and cost

An updated area of the home should have an improved look and feel, or functional utility. Changes that constitute updates include refurbishment and/or replacing components to meet existing market expectations. Updates do not include significant alterations to the existing structure.

Remodeled: Significant finish and/or structural changes have been made that increase utility and appeal through complete replacement and/or expansion.

A remodeled area reflects fundamental changes that include multiple alterations. These alterations may include some or all of the following: replacement of a major component (cabinet(s), bathtub, or bathroom tile), relocation of plumbing/gas fixtures/appliances, significant structural alterations (relocating walls, and/or the addition of square footage). This would include a complete gutting and rebuild.

The descriptions above are from FNMA for use by appraisers and other professionals.

Here is an example of an updated bathroom. The main bathroom in a 25 year old home has had the ceiling and all walls repainted. Several items have been replaced including: underlayment & flooring, the vanity cabinet top, toilet, all plumbing fixtures, light fixtures, light switch, outlets & covers, ceiling fan, baseboard molding, towel bar & toilet paper holder. The original tub/shower still had modern appearance and was in good condition. It was polished up an re-caulked. The vanity was a dated color and had minor wear. It was sanded and resurfaced with a modern color.

Here is an example of a remodeled bathroom. The main bathroom in a 25 year old home was completely gutted, re-wired, re-plumbed & re-insulated. Can lights were added in the ceiling, the old wall light fixture box was removed, & the ceiling fan location was moved & rewired to accommodate a lighted fan. An additional outlet was added on the other side of the sink. All drywall was replaced, sanded and painted. A new vanity cabinet, vanity top faucet and plate glass mirror we installed. A new tub/shower kit and toilet were installed. New underlayment & flooring, shower fixtures, light fixtures, light switch, outlets and covers, ceiling fan, baseboard molding, towel bar & toilet paper holder were installed.

Both bathrooms are of similar quality and have been modernized to have greater appeal in their market. But the remodeled one was more thorough and took significantly more money & time to complete.

Redneck Deck

Notice this is built on top of two rows of shipping pallets? I’m guessing that is not even close to code. It looks level at least.

New FNMA Standard = Lower Values

FNMA & FHLMC’s recent decision to require the use of the ANSI residential measuring standard will result in lower (and less accurate) value estimates for many home owners and more delay and confusion in an industry already besot with scope of work increases and lender overlays. While I am generally a big fan of standardization I believe Fannie & Freddie have made the worst possible choice for a measuring standard for one simple reason.

None of the data sources we have available to us use the ANSI standard!

ANSI is the most conservative, overprecise and time consuming method they could possibly have chosen. It is designed by and for engineers, did not exist prior to about 1997 and is not similar at all to the standard(s) used by local tax assessors, realtors or buyers & sellers in Illinois and the rest of the country. Its requirement for subject living area forces the appraiser to choose between using two incompatible standards (giving potentially lower value estimates) or trying to convert (guesstimate) assessor’s living area estimates to ANSI for each comparable sale used in every appraisal creating more less accuracy and more inconsistencies! The previous measurement standard used by Fannie & Freddie was already very similar to the one used in public records and therefore gave more consistent and accurate value estimates when used properly. It is astonishing to me that 2 quasi-government organizations, staffed with supposed experts could be so ignorant and put so little thought into this decision. I am glad to see that FHA, VA & USDA continue to use their more sensible measurement standards.

You decide

Should a large hissing snake by the back door count as a home alarm system?

Tax Appeal

Ben Franklin was right when he said “…in this world nothing can be said to be certain, except death and taxes. ” ; but it is also true that property taxes can be appealed and reduced.

If the assessor’s (retroactive) Fair Value estimate of your home is higher than the current value of your home it is very likely that you are being overtaxed. In Illinois you can appeal the value used to calculate your taxes with a special purpose retroactive appraisal by a state certified appraiser, or with your own research. You can not appeal with a real estate agents or brokers estimate, such as CMA or BPO. Appraisals developed for mortgage purposes or automated (clickbait )calculations like zestimates are also not acceptable. If you suspect an assessor in northeast IL has overvalued your home please contact me. I have many years of experience and my work has always been accepted by townships, counties and the state board.

Living Area Calculations

Did you know there are more than a dozen common standards used to measure the gross living area of single family residences in Northern IL? IL tax assessors have over a half dozen ways alone.  Some of the standards such as those set by FNMA/FHLMC, FHA, ERC allow exceptions or alternate standards, but others do not.  Most of the standards are similar but some can result in very different square footage estimates.

If you ever have a situation where you suspect differing measurement standards may be an issue affecting value please give me a call.  I have years of study on this topic and a collection of published standards, articles, samples and illustrations. I can provide anything from a quick review and consultation to a detailed written deposition. 

Ghost in the Appraisal?

I am currently completing an appraisal for a new home built on an infamous and reputedly haunted site in Manteno, IL. So far no paranormal activity, and nothing odd in the photographs, but I will keep you posted.

If you ever need a report on a home or group of homes that may be adversely affected by ghosts or other scary things such as: water contamination, mining activity, or a nuclear power plant give me call. I have over 20 years of experience, and an extensive CV and training.  Whatever the situation I am not afraid.

Appraisal Photographs

A neighbor called recently and asked me if appraisers are required to take photos of the recent sales used their reports. 

My answer – Yes, many appraisals used for mortgage finance decisions and similar uses require the appraiser to both personally view and photograph the exterior of each comparable sale or listing used in their analysis.  When this is required by lending guidelines or specific clients the appraisers must stop along public streets, highways and sidewalks to photograph homes. In some cases this additional research and verification can be very beneficial to the appraiser, their clients, and ultimately the public. #Appraisalphotos

Property Tax Alert

Over the past 20 years of providing independent appraisals, I have seen numerous errors in the living area estimates used by local tax assessors for the homes they value. Here is a common, easy-to-spot error I’ve seen in Northern IL especially Kendall and Grundy counties.

The sample sketch above shows the second floor area from the same two-story home. Notice how the open two-story ceiling area (such as over a foyer and family room) is not included as floor area on the sample on the left but is include in the sample on the right? If your home has this type of feature and has been measured like the sample on the right it is being over taxed for living area that you do not have! In this sample that difference is 600 square feet. There is no measuring standard that includes that type of space as floor area, yet I have seen it counted thousands of times in tax records throughout Northern IL! If you own a two-story home with open two-story ceiling area, you owe it to yourself to verify that the public records have this area excluded from the living area estimate used to develop your tax assessments. As an independent state certified appraiser I can provide a professional living area sketch that you can use to have this and other types of measurement errors corrected and your taxes reduced. This can done with a quick visit to the home and a simple consulting report or bundled with an appraisal report to fit any budget.

Let me help

If you have an upcoming decision to make regarding any 1-4 unit residential property in Kendall, Will, Grundy or a surrounding county, let me put my 20+ years of experience to work for you. I work diligently to provide well supported value estimates and consulting to help you make the best decision possible.