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By Robert Pratt | Broker in Chicago, IL

Home Appraisers Struggle in Fluctuating Market

Home appraisers have been having a difficult time these past few years –  whether you’re talking about Chicago real estate exclusively, or the national housing market. And if you’re on the market, with the desire to either sell or purchase a home, it’s worth your while to understand what factors into a professional appraisal.

Home appraisers determine the market value of a home. There are a number of considerations that inform the figures they arrive at, including the space of the house, amenities, whether or not there are any safety issues or health code violations, etc. The appraiser also has to consider all of this in the context of where the market is at any given moment.

As a recent article from the Chicago Tribune highlights, home appraisals were difficult to do as the housing marketing market started to suffer because there simply weren’t enough homes being sold to provide any sort of solid basis for price comparison.

Even though conditions within the local housing market are improving, appraisers are saying that there job hasn’t necessarily gotten much easier. Some Chicago real estate agents say that they’re complicating matters for both buyers and sellers. Appraisers force sellers to lower their prices and prospective buyers to pay more than they expected, or they cause total renegotiations all together.

There aren’t many distressed properties being sold in the current market, which is potentially beneficial for the traditional sellers hoping to have their properties appraised at contract sales price. But an undersupply of homes available on the market has led to bidding wars that has further complicated matters.

Appraisers consult a wealth of data that the average home buyer simply won’t have access to. This data helps appraisers as they examine market trends and how much money recent buyers are willing to pay for whatever given features. 

All of these considerations, plus a three-year history of a home that includes data on prior attempts to sell the property (and thus reveals something about the motivation of the seller), inform the professional appraiser’s assessment of a property's value.

So if you’re looking to sell a piece of property in Chicago, it may go for a high-price if there isn’t significant damage, it’s equipped with desirable amenities, and there are other favorable conditions in the market.

If you’re looking to buy, perhaps you should speak in depth with your appraiser about what informed the price he or she gave you for a given property. Knowledge is power for both buyers and sellers in a fluctuating Chicago housing market.

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