How a real estate appraiser uses InfoSparks to analyze the market

During a conversation with a real estate agent, I was asked how we support time adjustments when a market is hot and prices are increasing.  I started to explain how we use InfoSparks how it is a valuable tool for me as an appraiser. It allows me to look at different segments of the market very quickly and then use that information in my reports by depicting the trends graphically with charts.  While there are many different ways we can use this tool as an appraiser, there are four main ways I use it on every appraisal we do.  I go into more detail in the video above.

Median sale price change - This give great support for time adjustments or lack thereof.  This is crucial in increasing markets with low supply. Have you ever had an appraisal come in below contract price and there were no time adjustments?  If you were selling in a hot market with low supply, increasing median sale prices, and multiple offers, my guess is that the appraiser could have used this tool to support time adjustments to account for the increasing market.

Market time - This will show how quickly homes are selling and which direction the trend is going.  This can be helpful in explaining a Comp that may be an outlier. Maybe the average Market time for the market is 90-120 days and this home sold in 1 day.  Maybe it was under priced?

Supply of Inventory - This is also a big one.  This can be a really good indicator of which way the market will be headed.  For example, inventory levels under 3 months is often indicative of a shortage and indicates prices could be going higher.

Type of Sale - This can show the amount of distressed sales in relation to traditional sales.  Using REO/Short sales as Comps when they make up less than 10% of the is typically not the best choice.  But during the crash, there were certain neighborhoods that were predominantly distressed sales and this had a big impact on the market.  This allowed me to illustrate this to the reader of my reports.

If you are interested in learning more, I go into more detail in the video above.

Appraiser Helping Real Estate Agents Facebook Group!

I have created a Facebook group for local Realtors who have appraisal questions.  I will be sharing some great information that will help you understand things from an appraisers perspective and some tips to help you in your business.  You are encouraged to jump in and ask any questions you have. We are here to help!  Just click below and then click the "Join Group" button.

Why is an appraisal necessary?

Most appraisals are completed as part of the mortgage lending process, with the lender being the entity to request the appraisal. If you think of it this way, a bank has most of the money on the line. Before lending it to a borrower, they want to know whether that the property is worth the amount of money being borrowed to purchase it. The banks want to be sure that if for some reason the borrower stops making payments on the mortgage and stop paying off the loan, the bank can repossess the house and sell it in order to recoup the money lent in the first place. If an appraisal comes back to lender for far under the contract price, that would raise some concerns that the borrower is attempting to borrow more than the property is actually worth. Along with checking a borrower's credit score, debt-to-income ratio, etc., the appraisal helps the lender assess risk. This is known as the loan-to-value ratio. If a borrower is fronting 50% of the cost of the home for example, that means less risk for the bank. But if the borrower has a very small down payment and is borrowing 90% to 100% of the cost of the property then that is much more risky for the bank.

Other common reasons for an appraisal:

    • Estate Appraisal (Also known as a “Date of Death Appraisal”): When an estate transfers ownership because of a death or inheritance, in most cases a real estate appraisal is needed for tax purposes and often to determine a listing price for the home. (click here to read more)
    • Divorce Appraisal: For many couples, the marital residence is the largest asset obtained during the marriage and an accurate appraisal is extremely important (click here to read more)
    • Financial and Estate Planning: Financial and Estate Planners are often relied upon by their clients to provide sound, well-informed advice and the value of the real estate assets are often needed to develop the best and most effective strategies for their clients (click here to read more)
    • PMI Removal: If you purchased your home with conventional financing and put less than 20% down, it’s likely you’re paying PMI. If your property value has appreciated, providing your lender with an appraisal can help remove this additional cost (click to read more).
    • Tax Assessment Appeals: Most real estate and property taxes are based upon the value of the property. When the taxing agency values your property at a higher rate than the actual value, you are paying too much in taxes (click here to read more).
    • Pre-listing, Pre-Purchase, FSBO’s: When trying to establish a fair list price is often difficult to sift through all of the market data to determine a true value for your home. Itt’s common for homeowners and realtors to rely on appraisers for assistance when establishing a list price for the sale of their home (click here to read more).

A few words from our clients

Paul Rowe is a consummate professional. In appraisal work there are hard facts and there is nuance. Paul does not ignore factors that are outside of the facts that could influence the value of a piece of property - such as litigation regarding the property, conditions of the immediate neighborhood that might not be affecting other similar properties a few blocks away. Paul digs in, does his due diligence and is able to come up with a number that not only can be relied upon but can stand up in court (and has). Absolutely one the top appraisers in the Chicago metropolitan area.

Erica Minchella

Use Rowe Appraisal if you are looking for a knowledgeable and helpful company.

Jamie Bernhardt
Real Estate Agent

Call us today for a free consultation.

The Real Estate Price Per Square Foot Dilema

price per square foot

Ryan Lundquist of Sacramento Appraisal Group wrote a great post explaining economies of scale and how we run into instances all the time in our lives of something small costing more than a larger amount of the same thing. The Starbucks coffee analogy he employs is such a great illustration and I highly recommend checking his article out here (

The surprising thing Ryan pointed out, though, is that we often ignore these economies of scale when we make assumptions about the price per square foot of residential property. You might automatically think that a larger house costs more per square foot than a smaller one. As it turns out, when Ryan analyzed the Sacramento County (California) residential market he found that “the larger the house, the less you tend to pay for each square foot.”  That’s a very interesting observation but I wanted to add a few of my thoughts on the nuances that can complicate this explanation of economies of scale and the law of diminishing returns.

Three key points:

  • Ryan’s illustration assumes you are comparing two homes of equal quality.  In our Chicago market (as well as many others), the larger homes tend to have higher-end finishes and therefore, higher construction costs.  You wouldn’t want to compare a 4500 sq ft newly-constructed home to a basic 1950’s 1200 sq ft ranch or that ranch to a 2000 sq ft 1930’s English Tudor style home with architecturally significant details. Those are not the same apples! To see the true relationship of cost per square feet from property to property, the properties should be a similar to each other as possible (location, quality, lot size, functional utility, etc).
  • Also, we must consider the Fixed costs.  For example, let’s say we are comparing two new construction homes in the same development in the suburbs (this is based on actual numbers).  Both are of similar quality and style, with 4 bedrooms and 2.1 baths.  One model is 2500 sq ft and is selling for $250,000 ($100 per sf) and the other is 3100 sq ft and is selling for $275,000.  The construction costs for both of these homes include certain fixed costs.  Each has one kitchen, 2.1 baths, one HVAC system, etc.  The additional 500 sf most likely is attributed to larger rooms, maybe a larger kitchen, larger master bath, a living room and family room both. After those first 2500 sq ft are built out and the fixed components are in, the price for the additional square footage costs less to build.  In this case each additional sf over the 2500 is priced/valued at $41 per sf. ($275,000 – $250,000 = $25,000.  Then take $25,000 / 600 sf = $41/sf).  This is significantly less than the $100/sf the 2500 sf home is selling for.  If we applied the $100/sf to try to value the 3100 sf home, we would think it is worth $310,000, when it is actually being sold for $275,000.
  • What else is included in price per sf? Land! That itself may be just as important as the improvements when considering price per sf. When I take the sales price of a home and divide it by the gross living area (GLA), the resulting price per square foot isn’t solely attributed to the property itself but also to the site it sits on (which in many cases can be over 30% of the property’s value).  But the value of the lot is not all: the price per square foot also includes the condition, quality, beneficial location (across from a park, golf course, walking distance to restaurants or train stops) or adverse location (busy street, adjacent to commercial buildings, etc). All which basically brings us back to point #1.

That’s what can make appraising so challenging and interesting! Rarely am I presented with a bushel of organic Gala apples to chose my comps from, all the same size and perfectly speckled. Nope! Sometimes there are tart Granny Smiths and sweet, small Red Delicious apples in the mix.  It’s my job, as an appraiser, to consider the hard facts and attempt to measure market reaction to the subjective attributes of each when arriving at an opinion of value (and also to make sure I’m not throwing an orange or banana in the comparison mix). Price per square foot can sometimes be a good indicator or at least a piece of the market value puzzle, but will usually not tell  the whole story.

Tom Horn also has a great take on some of these same issues regarding agent’s pricing properties based only on Price Per Square Foot (


Realtor Tip: Multiple Offers? Tell the Appraiser!

This blog post goes out to all the Realtors who have had a deal fall through because the appraised value was below the contract price.  Some of you may even had multiple offers with most of them were even above the appraised value.  If this has happened to you, first and foremost: I feel your pain!  You are thinking to yourself, “If I have 4 different buyers willing to pay $400,000, how could the appraiser say that it is only worth $390,000?”   Well, there is nothing wrong with that logic.  But keep in mind that as appraisers we are tasked with giving our “opinion of value” and that value MUST be supported by facts and market data.  We can’t just say that we THINK it is worth $400,000.  We have to prove our case supported by facts and market data (aka Comparable sales, listings, and market trends).

Now, I know what you’re thinking, “Aren’t four separate signed contracts considered facts and/or market data?”.  Absolutely they are! It is a fact that 4 different buyers are willing to pay $X and this is certainly considered to be data from the market.  A good appraiser will take those facts into consideration in his/her analysis.

Why should an appraiser want to know this information?

How can you prevent this from happening again?  Tell the appraiser.  Bring him copies of the offers to the inspection.  Email him the offers. Why?  Here are couple of main reasons. 

  1. Is the contract price above list price? Multiple offers could help explain this. We are required to analyze the sales contract and listing history for the subject property. In most cases our clients require a comment/explanation when a contract price is higher than the most recent list price. Knowing that there are multiple offers indicates a strong demand for the property at that specific price point. If a home was only listed on the MLS for 5 days and has multiple offers, it most likely indicates that the list price is at or below market value. Or it could signal that inventory levels are low and buyers have very few alternatives. Or maybe both.
  2. Multiple Offers will alert a good appraiser to dig deeper.  If I am analyzing comparable sales and they are indicating a value below the contract price, maybe I need to call the agents on the listings and see if I am missing something (perhaps one or more of the comparables were distressed or estate or relocation sales and sold below market value). Maybe I need to look deeper at the current market conditions. Are inventory levels low? (Typically below 3 months would raise a red flag.) Maybe I need to look further into the median sales prices and see if the trend is showing significant price appreciation. In an increasing market, the appraiser should adjust comparables that sold several months ago upwards to bring that sale price to today’s market conditions. However, this needs to be supported by market data. (Infosparks can be a great tool for this if used correctly. Stay tuned for an upcoming post/video showing how it works and how you can use it in your practice.)

It's not a magic bullet, but it could make the all the difference.

I also want to be clear that I’m not telling you that if you have multiple offers you are guaranteed the appraisal will support your contract price.  However, this information can be a significant piece of the appraisal puzzle.  Because an appraiser must provide support for their value opinions, it’s critical that they seek out and receive as much information as possible.  That’s where you, as real estate agents, come in.  In my practice, I make it a point to ask if there were multiple offers.  But even if the appraiser who is appraising your listing doesn’t ask, I highly recommend you make them aware that there have been multiple offers.  To take it one step further, I strongly suggest you provide the copies of the contracts so the appraiser can keep them in their Work File as further support for the value conclusion.  Anyone can say they had multiple offers but we can put much more weight on those offers when we know for certain they exist.  

Remember, appraisers can’t just go out on a limb and appraise a property at the highest possible price.  Our definition of market value tells us we must appraise it at the most probable price (here is a previous post which goes into more detail - Market Value: Probable vs. Possible). When we are finished adjusting our comparable sales, we typically end up with a range of values.  The dispersion of that range can vary (typically less than 10%), but let’s just say for this example we started with a contract price of $400,000.  The range of adjusted comparable sales prices is $380,000 - $405,000.  If the appraiser was handed four signed contracts with contract prices of $390,000, $395,000, $400,000, and $405,000, it may give them that extra support they need to reconcile their final opinion of value at the upper end of the range.  After all, we are supposed to be determining the most probable price for which a property will sell.  To take it even one step further, if the appraiser analyzes the market and determines that there is a shortage of inventory and prices are increasing, they may be even more inclined to be more aggressive with their opinion of value.

​But without actual support and evidence, the appraiser can’t go out on a limb alone. Information about multiple offers may not make a huge difference in the appraised value, but it could make enough of a difference to get your deal closed!  Providing information about multiple offers to the appraiser is not just a service to him or her but also a service to your client!  For more information see my post on Tips for Real Estate Agents to Avoid a Bad Appraisal.


I have created a Facebook group for local Realtors who have appraisal questions.  I will be sharing some great information that will help you understand things from an appraisers perspective and some tips to help you in your business.  You are encouraged to jump in and ask any questions you have. Just click below and then click the "Join Group" button.

Real Estate Agent Property Questionnaire

I love when I have the opportunity to meet the listing agent at the property, but as you know, that’s not always possible. This fillable/interactive form allows you to make sure the appraiser has all of the information they need to complete a thorough appraisal of your listing. I’ve broken this form up into two sections with the first covering the recent updates to the property and the second related more to the market area and ways in which your listing shines. Each section/question is designed to help you communicate pertinent information to the appraiser that will be helpful is the appraiser determining the most accurate opinion of value.

Section 1 (Improvement/Updates)

By completing this section, you can make sure the appraiser knows about updates and improvements made to the property as well as their approximate cost. Obtaining the approximate cost of the improvements can be helpful in supporting a significant increase in value if the home had recently sold prior to these updates. While cost does not always equal value, knowing the cost of improvements assists the appraiser when analyzing the contributory value of each improvement. These updates are broken up into 5 year increments as this is how appraisers are now required to report the updates to the kitchen and baths in the appraisal report.

Section 2 (Market Information)

Here is your opportunity to provide the sales/listings you used to determine the list price -- essentially potential comps for the appraiser to consider. You can also address in the 2nd question major selling points. A good appraiser should already know certain benefits of a property’s location but you, as Realtors, often have more detailed or nuanced information about what prospective buyers are looking for. Think of what is most discussed or brought up by potential buyers when you are showing the house. Was it the large master bedroom suite, walking distance to the Metra or Blue line, proximity to downtown’s shops and restaurants, the best school district in the area? All of this is great information for an appraiser to have.

Multiple Offers and Additional Info

More specific questions, such as the one about multiple offers, may ultimately help the appraiser support an opinion of value that takes into account current market demand that may not be reflected yet in recent sales prices (possibly an indicator that values are increasing). Lastly, there is an area for anything else you want the appraiser to know.

Property Questionnaire

for Real Estate Agents

Questionnaire for Homeowners

We also do a ton of “non-lender” work, so I also created a modified version of this form to give to homeowners who call me directly for appraisals for divorce, pre-listings, estates, etc. Click below for a copy of this modified version to help you ascertain the recent improvements when putting the MLS listing together and pricing the property.

Chicago Housing Styles


Chicago style bungalowReal estate agents and appraisers alike often struggle to define the architectural style for unusual or unique properties. Have you ever gotten a new listing, took one look and started scratching your head and asking yourself how you are going to describe this to prospective clients?

Even more basic properties can present a conundrum when they nod to more than one typical style. The web offers some great resources to both educate yourself on architectural styles and help make a decision once you start completing the listing form on the MLS. The National Association of Realtor’s website offers a good starting point (    This article covers common styles across the country but since many architectural designs end up including a number of different styles, it’s good to know your Craftsman from your Colonial. Sometimes it’s just a little bit of detail that turns a standard Cape Cod into a Tudor.

Chicago housing styles via Big Shoulders Realty

Chicago housing styles via Big Shoulders Realty

Fortunately, Chicago definitely has some set, easily identifiable housing types.  Big Shoulders Realty, a boutique brokerage firm in Chicago, has an excellent page on their website that provides brief histories and descriptions of housing styles common to Chicago that can be helpful when describing a property on MLS (click on the image above to go to the page).  Then click on the housing style and you are taken to a page that also shows you actual houses in Chicago that are of that style.  It really is the best resource online I have found for the Chicago market (it should be called “Chicago Housing Styles for Dummies”).

But what do you do when you have a more recently constructed property? How do you avoid using the catch-alls “Traditional” and “Contemporary”?  Really, I’m asking.  Feel free to comment below!  General consensus has it that “contemporary” means “of this time” or moment. Something funky, modern-looking or new could fall under that category. For a property where “traditional” seems like the only option, maybe pull out the most prominent feature, like a turret or full front porch or examine the roof line for any elements that point in one stylistic direction or the other.

Rowe Appraisal Group specializes in “non-lender” appraisals and we complete pre-listings appraisals for real estate agents and homeowners all the time.  Don’t hesitate to reach out to us if you ever have any questions.  You can reach us at (847) 863-5776 or email us at

Property Questionnaire for Real Estate Agents

A couple of days ago I was sitting down to start writing a blog post on how to streamline the initial appraisal process, specifically gathering information on the subject property prior to doing the inspection. Over the weekend I listened to an episode of the podcast “Voice of Appraisal” where Phil Crawford mentioned an improvement worksheet that the Ohio Coalition of Appraisal Professionals (OCAP) has distributed to local area realtors. I recently contacted him and Steve Papin, the president of OCAP, who was kind enough to send me a copy. Here is the PDF (Property Questionnaire), or you can email me and I can send you the Word Doc that is formatted properly).

The main purpose of the questionnaire is to gather information that might otherwise be difficult to obtain. As you can see, the form provides the listing agent an opportunity to list all recent updates and any other details they would want an appraiser to know. Instead of springing all these questions on the agent at the time of the  inspection, by emailing a copy in advance they can have the time to do any necessary research and talk to their clients about the property before you even go there. And since it’s fairly often that a property is on a lock-box, you may not even meet the Realtor. Finally, at the end of the day you’ll have a document that can easily be saved to your work file.

In doing more research on these types of questionnaires, I saw that Ryan Lundquist of Sacramento Appraisal Blog, has also shared a “cheat sheet” that you can download here. This morning I was all set to wrap up my blog post by outlining even more benefits to these forms when I saw that Tom Horn, appraiser and author of the Birmingham Appraisal Blog, posted his own version of the “Property Questionnaire” here. So, clearly something is in the air folks! Tom’s blog post, as always, is top notch and has lots of good tips and suggestions for agents and homeowners alike.

I will most likely be creating my own form based on these three examples to include a section for any other additional features that the agent feels adds value to the property, or specific neighborhood info that the agent thinks is important. I suggest you do the same. Choose your own adventure or tailor one of these questionnaires to fit the Real Estate Agents in your own market! Once I’ve gotten mine whipped into shape, I’ll post it to my blog.

Land Value: Surplus vs. Excess

I recently came across this interesting animated GIF from an article from RealtorMag regarding land values over the last 40 years.  It followed the overall housing market by peaking in 2006 and bottoming in 2011.  When thinking about land value it is important to understand a fundamental concept of surplus land vs. excess land.  Jonathan Montgomery also wrote an excellent post with some additional information on this topic you can read here.

EXCESS LAND is the portion of the lot that is not necessary to meet the existing zoning requirements AND could possibly be sub-divided and sold off as a separate parcel.  
SURPLUS LAND is not large enough to be separated from the existing parcel and therefore, does not have as much value as excess land.

The trick I was taught to remember this is excess land is excellent.  Let's look at the following two slides below from a recent class I took from the Hagar Institute (which I highly recommend for all appraisers).

Source: How to Support and Prove Your Adjustments by Richard Hagar 

Source: How to Support and Prove Your Adjustments by Richard Hagar 

In this example, a 3000 sq. ft. lot is valued at only $3 per sq. ft. as it is considered unbuildable and has minimal utility.  Once you get to 5000 sq. ft. the value per sq. ft. increases to $40 per sq. ft. Therefore, a 3000 sq. ft. lot would have a market value of around $9000, while a 5000 sq. ft. lot would have a market value of $200,000.  

Remember that when appraisers are analyzing land values, we are NOT making adjustments on the total size, but instead the incremental change in size.  This same theory can be applied to many other features of real estate as well (GLA, first bed or bath, first 50' of water frontage, etc.)  If you have any questions please feel free to call me at (847) 863-5776 or leave your question or comment below. 

The Housing Value of Every County in the U.S.

The Housing Value of Every County in the U.S.

I recently came across this map posted on Twitter by Max Galka of  It shows a map of the U.S. with the land area of each of the individual counties being substituted by the total market value of the housing.  Keep in mind that this is the sum of the values for each county, which is going to be skewed by population; nevertheless, this GIF is way too cool not to share.  

I found this map is really hypnotic.  Several times while typing this post I have found myself zoned out just staring at it.  Anyone else?

Also, I would love to see this type of map that separates out all of the Chicago neighborhoods and suburbs.  My guess would be the North Shore, downtown and Lincoln Park in Chicago, and the Hinsdale/Oakbrook area would be the largest.

Market Value: Probable Vs. Possible

Market Value DefinitionThe CU (Collateral Underwriter) is obviously a hot topic right now and there are many excellent blog posts written by fellow appraisers that point of many of its flaws (see the bottom of the page for links to those posts).  On a recent positive note, Fannie Mae recently sent a letter to its lender clients that included the statement, “Before asking the appraiser to consider any alternative sales, it is imperative that the lender analyze the relevance of the sale and determine if the use of such a sale would result in any material change to the appraisal report.  If the lender determines that there would be no material change, then they should not ask the appraiser to make revisions.”

But what I want to touch on in this post is that the existence of the CU will more than likely change the approach of many appraisers (in a good way).  Why would this change an appraiser’s approach?  One of the answers lies in the definition of market value as defined by Fannie Mae.  Sometimes as appraisers, we may need to be reminded of one of the most important parts of this definition.  Fannie Mae’s definition is as follows:

Market value is the most probable price that 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, 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:

  • buyer and seller are typically motivated;
  • both parties are well informed or well advised, and each acting in what he or she considers his/her own best interest;
  • a reasonable time is allowed for exposure in the open market;
  • payment is made in terms of cash in U.S. 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.
The key part of this definition that I am focusing on is “the most probable price”.  Not the highest possible price, the most probable.

As was recently pointed out on the Voice of Appraisal with Phil Crawford recently, “Possibilities and probabilities are two totally different things”.  Prior to the HVCC, it was not uncommon for appraisers to be asked by loan officers, “What is the highest value you can appraise this property for?”.  The HVCC eliminated much of that by adding a layer of protection (and in-consequently taking a chainsaw to our standard fees).  However, there were still appraisers that would search the neighborhood and cherry pick a few of the highest sales in an effort to support the purchase price.  However with the CU, if only the 3 comparable sales with the highest sales prices are used, the CU will most likely bring that to the attention of the lender, who could in turn bring it to the attention of the appraiser.  If you are appraising a home that has 10 similar sales in the neighborhood and you use the three highest, the appraiser better have support and be prepared to explain why their value is at the upper end of the range.  That is not to say that in certain circumstances it should not be at the upper end of the range (superior condition, superior quality of construction, larger lot size, superior view, larger GLA, etc).  But if the subject is in the middle of the range when compared to the comparable sales in terms of many of the factors that affect value (GLA, condition, quality of construction, bed and bath count, view, location, basement area and finished basement area, lot size, etc), then the final opinion of value should not be at the extreme high or low end of the range.  Again, our job is to determine the most PROBABLE price the property would sell for, not the highest POSSIBLE price.  This should also help keep artificially inflated appraisals out of the refinance and home equity markets.

How this plays out over the long term remains to be seen.  I know most appraisers have much bigger concerns with CU and how it will impact our profession in the short and long term, as do I.  It’s just that these issues have have all been written about by other appraisers.  I just thought I would suggest a revisiting of the definition of market value.  The “most probable and not highest possible” portion of the definition is also something that appraisers can point out to educate your clients and even real estate agents when your opinion of value is below a contract price.

Links to additional articles on the CU:


Rowe Appraisal Group specializes in real estate appraisals for divorce, estates, pre-listings and more throughout the Chicagoland area.  If you have any real estate appraisal questions, please feel free to call us at (847) 863-5776 or email

Paired Sales in the Chicago Condo Real Estate Market

Chicago Condo Garden

With all of the discussion regarding the CU (Collateral Underwriter) and using regression analysis to support adjustments, I thought I would share a recent, good old fashioned Paired Sales Analysis (Matched Pairs) to determine an adjustment for a Garden unit vs. a high first floor unit.  The idea behind paired sales is to find 2 or more sales that sold around the same time, in the same location, that are the same with the exception of one feature.  The difference between to the two sales price should give you a supportable adjustment.  The best thing about condo conversions in Chicago, is that when they are converted from apartments, the building and units are often rehabbed and resold around the same time.  Even better, they are often rehabbed by the developer with similar finishes in each of the units.  When the garden unit has the same floor plan as the units above it, it creates a perfect data set to extract a matched paired sales adjustment.  You have similar location (same address), they typically sell with a few months of each other, and are similar in bed and bath count, GLA, etc.

I was appraising a garden unit in on the northwest side of Chicago.  While I was able to find other recent sales of garden units for comparable sales, I needed to use a non garden unit to bracket a particular feature.  After pulling 3 recent garden unit sales, I found out when the buildings were converted and look up the sales prices of each of the units at that time.  Here is the data below:

Chicago real estate apprasier

As you can see above, I have four different paired sales to analyze.  One building actually provided two sets as the two units both sold again recently within 2 months of each other.  The percentage difference ranged from 9.2% – 15.3%.  After average all four percentages, I was able to come up with a 12.5% adjustment for the difference between a garden unit and the unit above it.  When the CU comes back and I am asked why I gave such a large (or small, who knows with CU) adjustment for floor level, I can cut and paste this into the addendum.  Or better yet, just put in into the report in the first place and hopefully avoid the hassle.

While this ended up working out really nice and neat for this appraisal, my fellow appraisers will attest to the fact that finding good paired sales in all circumstances in just a pipe dream.  I just thought I would share one example in which it worked out really well.  I have been testing many of the recent regression tools available for appraisers and have found a couple to be really promising.  Once I learn all of the nuances and techniques, I believe they will be extremely helpful in many situations.  But those of you who have tested them know, they often give some crazy results and other methods will still be necessary.  My favorite so far is PAIRS, by Gandysoft.  Please leave a comment and let me know which software you are finding to be the most useful so far.

Rowe Appraisal Group specializes in real estate appraisals for divorce, estates (date of death), pre-listings and more throughout the Chicagoland area.  If you have any home appraisal related questions, please call us at (847) 863-5776 or email

Best Time to Buy or Sell Chicago Real Estate


I recently read an excellent blog post by Gary Kristensen (click here to read).  I thought I would similarly take a look at the Chicago market and try to graphically depict the best time to buy or sell in the Chicago real estate market.  As we all know real estate is seasonal in most markets with the school year being a big factor, but more so in Chicago due to the blustery winter months.

I exported every monthly data point from the S&P/Case Shiller Home Price Index dating back to 1986 (that’s 336 total data points and 28 monthly data points which should be a large enough of a sample to account for any outliers).  I then averaged each month and charted the results…..


Chicago Case-Shiller Chart



As you can see, it appears as if the worst times to sell would be January through April (all below the yearly average).  Also, keep in mind that these are closed sales which most likely went under contract 1-3 months prior.  So while August appears to the best, those homes most likely went under contract in July and originally listed for sale in April or May (assuming a 60-90 day marketing time).

As Gary astutely points out in his post, most people who are selling a home are also buying a home.  Therefore, in these cases, trying to time the market isn’t necessary.  For those who are only selling, it looks like listing in May or June would be best (assuming we add 60 day marketing time and 2 months to close).  I have also heard an interesting thought from one Realtor who said he loves to list a home and have an open house the Sunday in February after the Superbowl.  He said he does this to get ahead of the market and also he gets a tremendous amount of traffic.  He thinks it is because many women who want to get a head start looking at homes are finally able to get their husbands out of the house on a Sunday. This is clearly anecdotal evidence (and kind of funny), but an interesting approach nonetheless.

Oddly, December had the second highest average that I could not account for.  I showed this to a few other real estate appraisers.  They weren’t sure either and thought this could be corporate transfers coming in prior to years end for write offs to people trying to close before the snow comes.  If you have some thoughts are what is causing this spike, please add them to the comments below.  Also, when is your favorite month to sell.


Rowe Appraisal Group specializes in appraisals for divorce, estates (date of death), pre-listings and more throughout the Chicagoland area.  If you have any questions, please call us at (847) 863-5776 or email




Top Factors Affecting Your Chicago Real Estate Value


I often get asked while completing appraisal inspections, “Do you count X when you do appraisals?”.  The short answer is that we try to consider everything that a typical buyer for that property would consider.  Below are some of the top factors affecting home values from a Chicago real estate appraiser’s perspective.


Location or Neighborhood

In Chicago, the neighborhood you live in can have a drastic effect on your properties value.  Your home’s proximity to public transportation (CTA or Metra stations) as well as restaurants, shopping, grocery stores, quality schools, parks, etc all affect value. Conversely, having a location with noise pollution can have an adverse effect on your home’s value (directly across from train tracks, on a busy street, next to a gas station, etc.)Es war einmal in Deutschland 2017 movie download


Gross Living Area (GLA)

GLA is defined as all liveable space that is 100% above grade (Gary Kristensen has a great article and video that goes into further depth). The amount of value per square foot is determined on a case by case basis depending on many factors.


Condition or Effective age

The effective age of the home is determined by the amount of updating or overall condition. For example a home built in 1955 could have a 10 year effective age if the home has recently had a significant amount of renovations completed. Keep in mind that just because you spend $25,000 on a new kitchen that does not necessarily increase your home’s value by exactly that amount.


Quality of Construction

This refers to the materials used to build the home and the overall quality of finishes on both the interior and exterior. For example, an all brick home compared to a home with aluminum siding or stucco, granite countertops compared to laminate countertops, hardwood flooring compared to carpeting, solid core 6-panel interior doors compared to hollow core flat panel doors, etc.


Lot size

A larger lot can add significant value. This is especially true when looking at possible “tear downs” in Chicago because the size of the new construction home is typically limited by the zoning department to a percentage of the size of the lot. A 30’ x 125’ lot compared to a 25’ x 125’ lot can have a significantly higher value in areas where there is a demand for buildable lots like Lincoln Park, Old Town, Gold Coast, etc. As you get further out on the northwest side and there is not as much demand for new construction, a larger lot could mean room for a side driveway.


Bed and bath count

Generally speaking, more is better. However, in many neighborhoods there is no discernable difference in value between a 4 bedroom and 5 bedroom home. The law of diminishing returns typically will apply. For example, the difference in value between adding a full bath to a 1 bath home is typically greater than adding a 4th bath to a 3 bath home.



This can be best demonstrated by condos in Chicago high rise buildings. Two units that sold at the same time, with the same floor plan, located on the same floor, but with different exposures will likely have different values. The one that faces west and only has a city view vs. the other unit that faces east and has a view of Lake Michigan can have as much as a 10-15% difference in value.


Additional features

These are things like fireplaces, decks, porches, patios, garages, landscaping, layout (open floor plan vs. closed/boxy layout), etc.  Jeff Hamric discusses floor plans with functional obsolescence here.


While these are the top features that influence value, there are many other things real estate appraisers consider. If you have any questions on how any of these items may specifically affect your situation, please feel free to post a comment below or call me at (847) 863-5776.

Tips for Real Estate Agents to Avoid a Bad Appraisal

realtor tip- How to avoid a bad appraisalAs a real estate agent, it’s possible you have been the victim of an appraisal that came in below the contract price. Then when you saw one or two of the sales the appraiser used, you were upset.  You wanted to scream, “But that house has X, Y, and Z differences!” In many of those cases, it’s possible that the market just didn’t support the contract price, while in other cases, it was the result of a bad appraisal.  Here are some tips to help you prevent the latter from happening.

As experienced real estate appraisers, some of us like to think we know it all; we know everything about every street of every one of Chicago’s 200+ neighborhoods. But the truth is, we don’t. As certified licensed appraisers, we are required to be geographically competent in the areas we work. However, it is impossible to know the intricacies of every street and neighborhood in Chicago and the surrounding suburbs. A truly good appraiser makes use of all resources available to ensure we are giving our clients the most thorough, accurate appraisal possible, and that includes reaching out to real estate agents and accepting/analyzing any sales you provide.

There is a myth that real estate agents can’t talk to appraisers. Appraisers are by law required to develop a well-supported, unbiased opinion of value. We must be independent, impartial, and objective and cannot be an advocate for either side of the transaction. As long you, the real estate agent, are not trying to influence or pressure the appraiser to arrive at a particular value, we should not only welcome a conversation, but seek it out. I want as much information as possible, and if the agent feels it would be helpful to provide me with some comparable sales to consider, I am happy to look at them. Does that mean I will just take the three sales you give me and use them in my report without completing my own due diligence? Of course not. When I’m provided with sales, that is exactly what they are, sales. They do not become comparable sales until the appraiser has analyzed them and decided that they are the most similar sales in the neighborhood and are the best indicators of market value.

It is most valuable when the agent gives me two or three truly comparable sales from the MLS with notes pointing out things that may not be easily observed just by looking at the listing sheet. It is less valuable when I’m given a stack of MLS listings by the agent and it appears that the only search criterion they used was all properties that sold above the contract price of the subject. A thorough appraisal should will always include an exhaustive search of all sales and listings in the subject’s market area and only those that are most similar to the subject should be selected.

In some cases, it is the most helpful when I am provided information on a sale that appears to be similar to the subject, but sold below the subject’s contract price (believe me, we are going to find it anyway and it is best to explain the situation up front). Here are a few situations I have run into in the past when a sale appeared to be very similar to the subject but there were certain issues that could have been easily overlooked or were not properly communicated on the MLS:


  • A sale was listed as a 4 bedroom, but 2 of them were in the basement and represented that way on the MLS listing.
  • The house was located on the rear of the lot and it sold lower because it lacked a backyard with privacy.
  • The only bath that a Tudor style home had was on the first floor while all three bedrooms were on the second and therefore functionally undesirable to most buyers.
  • The home’s basement had flooded after being listed (therefore was not mentioned on the MLS listing sheet) and the buyer negotiated a lower price to factor in the cost of rehabbing the basement.
  • Homes on the west side of street A are selling at a premium to the east side because they back to other single family homes while the east side backs to 2-4 flat buildings (as was the case on a recent appraisal in the Lakewood Balmoral neighborhood).
  • Sales on the south side of the Isabella Street go Evanston High School and those on the north go to New Trier (significant difference in value).
  • The subject is a unique house for the area with no recent sales of similar houses on the MLS, but there was a similar home that sold FSBO recently (we can typically verify those through various sources but may not have initially found it on our own if it was not listed on the MLS)

Many of you also often specialize in a particular neighborhood and can let us know these things. There are endless of examples that I could give of situations where the real estate agent made me aware of something I otherwise may not have noticed or known.

As real estate agents, you have an advantage over appraisers with regards to access to the buyer/seller’s thought process. You are meeting buyers and sellers every week and you get to hear what buyers think and how they are making their decisions. You have walked through or toured the interior of many of the sales and listings in the neighborhood and have heard feedback from your clients (aka “The Market”). This can be very valuable information for appraisers as we are trying to determine “Market Value”.

It is our job to reach out to you. Unfortunately, we are typically given no more than 48 hours from the time of the inspection to have the completed report submitted to the client. That means if we call and leave a message letting you know we have a question, we really do need to hear back from you that day or the next. It is not uncommon for me to get a call a week later when I have already signed and submitted the report. It is much easier to edit a report with new information BEFORE it is signed and submitted to the lender.  We know you are busy and your time is just as valuable as ours, which is why I make sure to let those that do take a couple of minutes with me on the phone, that they are appreciated.

Appraisers are trained in many different techniques to analyze the market but similar to real estate agents, not all appraisers were created equal.  Some are willing to go the extra mile, while some may not.  And you as the real estate agent can be a really good information resource for those appraisers willing to reach out and those agents willing to share their knowledge.  By pointing out some of the issues listed above, you could end up avoiding an “appraisal problem” in the future.

If any of you have any appraisal questions on this or any topic, please feel free to leave a comment or call me directly at (847) 863-5776.

And a HUGE thank you to all the agents that have taken my calls over the years!


Do you need help in challenging a bad appraisal?  I have provided two different templates below that you can use to do so effectively and efficiently.


Template 1 for Challenging a bad appraisal
Template 2 for Challenging a bad appraisal



Chicago (Lincoln Park) Condo Market

Lincoln Park Condo MarketBased on recent speculation in the national news about a cooling housing market, I recently analyzed the Park Ridge market to get to see where prices might be heading.  This time I will be looking at the Lincoln Park neighborhood in Chicago.  I wanted to compared the current median sales prices vs. those that are under contract and are expected to close in the next 30-60 days. First lets look at a few charts to see how the market has performed over the last year.



Year-Over-Year Median Sales Price (Rolling 12 month average) – As you can see below, while the overall condo market is up 5.6% year-over-year, the upward trend appears to be flattening out and the market appears to be stabilizing.



Months supply of inventory – Supply is down to 2.9 months of inventory but is slowing creeping back up.  (down 6.8% year-over-year)  Whenever supply is below 3 months of inventory we consider the market to be under supplied.


Average Market Time – The average time it takes to sell a house is significantly less (down 27% year-over-year) but this indicator is also flattening out with the last 4 months having an average market time of 57 days.



List to Sales Price Ratio – The amount the home sells for vs. what it was most recently listed for has only increased about 0.6% year-over-year and has leveled off at a strong  98%.  (This can sometimes be skewed as many condos are listed with parking “not included” and then the final sales price includes a $10,000-$25,000 deeded parking space.


Distressed Sales – As you can see below the number of REO (foreclosures) and Short Sales haven’t been a big factor in Lincoln Park over the last few years but still show a positive sign as they are down 49% and 64% year-over-year.




Overall, while the market has had a good year, these statistics are considered to be in the “rear view mirror”.  As I analyze the market to help homeowners determine an appropriate  listing price for their home, (click here for more info on that process) I analyze forward looking indicators in an effort to be aware of what may be in store for the market.

I decided to use 2 bedroom/2 bath units in an attempt to break out the extreme high end and low end of the market and compare apples to apples.  After noting the current median sales price of $408,000, I compared those two data points to a more forward looking data point, pending sales.  The current median list price of the units currently under contract is $394,000.  That is approximately 3% lower than what has sold over the last 12 months.  With the exception of a few hot markets, homes very seldom sell at list price.  Over the last 12 months, the list to sales price ratio is approximately 98% (see chart above).  Therefore, once the 2% is removed from the pending sale to anticipate the final sales price, there is still a projected decrease in median sales price of 5-6% for those units currently under contract vs. the current 12 month median sales price. Due to their only being approximately 50 units in the pending/under contract data, I expanded the data to include all active listings as well.  That brought up the median list price to $400,000 (2% higher than the “under contracts”).  But keep in mind, these listings could still experience a lowered list price as they are still not under contract, which could account for the 2% bump.

In summary, while the overall market has been strong over the last 12 months, the Lincoln Park condo market in Chicago does appear to be slowing.  However, with such a low supply of inventory on the market, things could turn back up.  Also keep in mind that we will soon be heading into the seasonally slower fall and winter months.   For more Lincoln Park charts check out our Lincoln Park Page.  If you have any questions, please feel free to call us anytime at (847) 863-5776.


Chicago’s Luxury Housing Market

Chicago Appraiser 499The luxury home market started heating up last year. Based on the Chicago area MLS (this does not include private sales and those not listed on the MLS), in 2013, there were 365 homes (including condos) that sold for over $1,500,000 in Chicago. That’s a 20% increase over 2012. In the surrounding suburbs there were 353 homes that sold for over $1,500,000 which was a 29% increase year over year.

I personally have seen an increase in appraisal requests for these high end properties as well. In 2013, I appraised 26 homes that were valued over $1,000,000 while in 2012 I only completed 17.
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The Secret to a Stress-Free Appraisal Experience

Whether you are buying or selling a home, it can be a very stressful time and one of my goals is to provide a service that makes the experience as stress-free and transparent as possible. About a year ago, I received a phone call from a homeowner in the Edison Park neighborhood of Chicago who wanted to get an appraisal to help them determine a price to list their home. During the conversation he asked, “Why should I hire you?” It caught me off guard because usually the first question I get is, “How much do you charge for an appraisal?” (I won’t get into that here, but I can promise you that it is not a good idea to hire your appraiser based solely on fee. See my blog article, "The Cheapest Appraiser", for the reasons why.) His question really made me think about what separates me from other appraisers in my market area. I started thinking about the feedback I most often get from clients and what’s most important to me when it comes to how other people perceive my company.

I think it is important to state that there are certain fundamental characteristics that every good appraiser should have (ie. experience, local knowledge, education, attention to detail, standards and ethics, etc). While I possess all of those characteristics, I know based on what my clients have said time and time again that I provide something else that is invaluable to them. When I’m hired by a homeowner, most of time they are looking to either determine a price to list their home (FSBO or just needing a second opinion from an unbiased third party other than their Realtor) or determine fair market value when purchasing a home to make sure they are not overpaying. Most appraisers will come out and measure your home, take some pictures, and ask a few questions. Then several days later you get an email with a PDF of an appraisal report. You‘re anxious to see what value the appraiser has come up with and you open the report only to find that you have no idea what you’re looking at. Most appraisal reports are 30+ pages in length and filled with appraisal jargon and lending terms that the typical homeowner just doesn’t understand.

That's why it is important to take a different approach to these types of “non-lender” assignments. All of my appraisals involve two Consultations (one during the initial inspection and another after the appraisal report has been completed). During the first consultation I interview the homeowner to find out what their expectations are and explain how the appraisal process works. We talk about the house they are buying or selling, and I point out any items of concern I see during the inspection. Once the report has been completed, I typically have the second consultation in which I come back to the house and we go over the report together to discuss the following:

  • I explain how the report is laid out and where to find the most important information.
  • We go through the charts and graphs that I have added to the report and I explain the current market conditions and property value trends in their neighborhood and how that affected my value conclusion. These charts not only show an overall view of the median sales price trends, but also give an indication of of the amount of housing supply on the market. I explain what an undersupply or oversupply of housing stock could mean for the value of their home.
  • We go through the sales I used and I point out the differences in condition or quality of construction and which features are more desirable and why. I then show them the listings in the area that they would be competing against and what that means for their property. We also go over where these comparables are located on the map and discuss any location adjustments that were deemed necessary.
  • And maybe most importantly, I ask them if they have any questions. As you already know, buying or selling a home can be a stressful proposition, and I want to make sure that the appraisal/valuation portion of the process is as stress-free and easily understood as possible.

This is the portion of the appraisal process that my clients appreciate the most. By taking that extra time to explain the report and answer any and all of their questions, I ensure that they are satisfied. I want to make sure that the appraisal/valuation portion of the process is as stress-free and easily understood as possible. In working with homeowners, I have found that this is my favorite part of the business. It really allows me to help through this process is an easily understood way. This is a much different world than the lender/refinance world where rules and regulations get in the way of who you can talk to and what you can discuss. At a time when everyone is in a hurry to move on to the next job, I think it is important that you find someone who will take their time and make sure all of your questions have been answered.

Please feel free to email me or call me at (847) 863-5776 with any questions you might have.

How to Prepare For a Real Estate Appraisal Inspection

If you haven’t had an appraisal completed on your home recently, one of the first things that may come to your mind is, “What do I need to get ready for this?”.  Here are some helpful things you can do prior to the appraiser coming to your home.

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Chicago Appraiser vs. Zillow

I recently read a really interesting blog article from an appraiser in Philadelphia titled “Zillow vs. The Coyle Group”.  In the article, Michael Coyle analyzes over 20 of their most recent appraisals and compares them to what Zillow says they are worth via it’s Zestimate.  With sites like these appearing to be gaining popularity with consumers over the last few years, I thought I would do my own analysis. Below are the results: Zillow final The results may surprise you, they did me. Read More

What You Need To Know About Your Divorce Appraisal

For many couples, the marital residence is the largest asset obtained during the marriage.  Whether you or your spouse wishes to retain the marital residence after the divorce, it is important that an accurate value is obtained for purposes of property division.  There are typically two options regarding the home.

  1. The property can be sold and the proceeds divided.
  2. If either party wants to remain in the home, they can pay a settlement to their spouse.

In either case, an appraisal is needed.  In scenario #1, an appraisal should be obtained to help determine a listing price in an effort to limit the time the house will be listed for sale and maximize the selling price.  In scenario #2, the judge will not make a ruling on the settlement or division of property without an appraisal by a certified real estate appraiser.  As to who is responsible for the appraisal fee remains at the discretion of an agreement between both parties or court ordered by the judge.

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