The mother-daughter real estate team of Marlene Rubenstein and Dena Fox believes it is their job to provide as much information as possible when their client’s property is appraised.

“We send a lot of information ahead of time to the appraisers including floor plans, lists of everything our client has done to the unit or house, and all market data,” says Fox of Rubenstein Fox Team at Baird & Warner in Chicago.

Property appraisals are performed for a variety of reasons including mortgage lending purposes, tax assessments and negotiations between buyers and sellers, according to the Appraisal Institute in Chicago.

REALTORS® can play a role in sharing pertinent materials about a property, but they and their clients also need to be aware of appraisal rules including a recent change by federal regulators on the price of homes needing an appraisal.

As an appraiser, Dave Binz, president and chief appraiser of Realpro Appraisals Inc. in Elgin

New amended rule raises threshold

For the first time in a quarter of a century, federal regulators have raised the limit on most residential real estate transactions requiring an appraisal from $250,000 up to $400,000.

The change came about in late 2019 “to provide burden relief without posing a threat to the safety and soundness of financial institutions,” according to a news release from the Federal Reserve, Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency.

REALTORS® should know this new limit does not apply to homes being backed by a government loan such as FHA, VA, Fannie Mae, Freddie Mac and more.

As an appraiser, Dave Binz, president and chief appraiser of Realpro Appraisals Inc. in Elgin, says he believes everything should be appraised.

“A real estate transaction becomes a very emotional decision for buyers and sellers. A good appraiser provides protection to the person buying the home,” he said.

An appraisal is one of the lowest price components of a real estate transaction and it can give buyers peace of mind paying for a property, Binz said. Yet, he realizes in some places, some people don’t care if they are overpaying.

PJ Trautman is a licensed appraiser, real estate broker and property manager within his family's brokerage, Champaign County Realty in Champaign

Saving homebuyers money (maybe) and time

Appraisals still are being ordered on the majority of refinance and purchase transactions, says PJ Trautman.

He is a licensed appraiser, real estate broker and property manager within his family’s brokerage, Champaign County Realty in Champaign. He expanded his business with Appraisals By Trautman in uptown Chicago.

Appraisal waivers have become a popular way to make the buying process slightly more affordable to buyers, he adds. Lenders use Automated Valuation Models (AVMs) to value properties, but sometimes those automated models might not be accurate, he said. For a purchase transaction, a waiver might be used if the buyer borrows less than 80 percent and is well-qualified. Plus, the property should be located in an area with ample and proximate comparable data.

“An appraisal waiver, when used in a residential transaction, typically saves an Illinois buyer $300-$750. I don’t believe this new savings will be notable enough to (prompt) additional people to purchase who otherwise wouldn’t have,” Trautman explains.

The national average cost of a professional appraisal runs $336. However, those properties which require a lot of work by the appraiser can jump over $1,000, according to That appraised value can be used to determine how much clients will pay in real estate taxes, too.

Fox believes the $400,000 property limit increase will make the buying process faster. “You don’t have to wait on an appraisal in a busy market. That can take a week or more,” she says.

Her mother, Marlene Rubenstein, emphasizes that REALTORS® need to understand the distinction between a contract contingent on an appraisal and an appraisal contingent on securing a mortgaged loan.

Trautman encourages agents to check real estate taxes for their current listings to ensure they are appropriate and accurate.

“Real estate taxes can make or break a property’s affordability for a buyer,” he says.

The mother-daughter real estate team of Marlene Rubenstein and Dena Fox

Relationships between REALTORS® and appraisers

The mother-daughter duo feel real estate agents should offer better communication with appraisers.

“Most appraisers have 95 percent of the work complete by the time they come to do an appraisal,” Fox says. “A lot of agents just open the door and explain a few things and hand the appraisers the information at the appointment. At that point, the appraisers have already done most of the hard work.”

That’s why the pair researches comps, gathers other pertinent information and puts together a packet with everything they and the homeowners know to give to the appraisers ahead of time.

Trautman agrees with their process because an appraiser has no desire or motivation to delay a transaction.

“REALTORS®, both listing and buyer agents, could take a more proactive approach to the appraisal process when they have a buyer utilizing VA, FHA or USDA financing programs,” he adds. “I suggest for them to do a cursory overview of the property and ensure that the required property conditions are met.”

It helps for an agent to know the rules and help a seller understand what necessary changes need to be done. For example, one loan program may require a smoke and carbon monoxide detector within 15 feet of every bedroom. (Note that state law requires these things, too.) That should be done before the appraiser gets there.

“The appraiser is required to report the true conditions at the time of the appraisal site inspection,” Trautman adds.

Binz says that some agents won’t give him any information before the appraisal while others hand over all kinds of data.

“Agents can interact with appraisers without repercussion. Some still feel like they are trying to persuade the appraiser if they hand them a packet,” he adds. “But they are the people with their boots on the ground. The small talk that we get from REALTORS® can be very valuable.”

While the appraisal must be independent, it is proper and allowable to provide property information that is relevant to a determination of value.

An appraiser’s process

Binz explains that his appraisals can take as little as 30 minutes for a small house. A bigger house can take an hour or more depending on the square footage. All features of the home from hardwood floors to granite countertops to new roofs get photographed and listed.

“I try to involve the homeowner as much as I can. They can walk through the house with me,” he says.

Homeowners generally are very proud of their homes and the things they have upgraded. They mention everything from putting in a new furnace three years ago to changing all the lighting a few months ago.

For Trautman, he first compiles all information including MLS data, public records, property record cards and surveys, and plat and aerial maps.

He then verifies the gross living area, confirms bedroom and bathroom counts, and assesses the functional utility of the floor plan. Appraisers are trained to look beyond clutter and mess.

After the site inspection, he searches comparable houses and observes the surrounding areas that influence the market such as parks, the school district and ponds. Negative aspects such as a busy road, noisy railroads and environmental hazards get written down.

“I am determining what specific features a prospective buyer may notice when comparing this property to those that might be offered for sale at the same time,” he says.

The appraiser can only discuss results with the client of the assignment. In a purchase transaction, this usually is the lender even if the buyer paid for the appraisal, Trautman states.

If a REALTOR® or their client has questions about the appraisal, they should direct the questions to the party who ordered the appraisal, likely the lender. If the client finds the questions or concerns valid, the client can approach and ask the appraiser for corrections or clarification.