Sometimes people buying or selling real estate confuse property surveys with appraisals, and vice versa. Different states will use them differently, and this article addresses how property surveys and appraisals are used in Illinois real estate transactions, and the difference between the two.
A property appraisal is a formal report, usually done for the benefit of the bank, stating how much the property is believed to be worth at fair market value. The appraisal takes into account the neighborhood, size and age of the house, amenities, overall condition and so forth. If the property appraises too low, the bank may reconsider giving a mortgage to the buyer. A good real estate attorney will also make sure to protect buyers from over paying for the house in case it appraises lower than the agreed upon price.
A property survey is not ordered by the bank, but is typically ordered by the seller as most Illinois contracts require one for the sale of a single family home. The survey looks like a large blueprint of the land and is used to determine property boundaries. They are used to be sure that there aren’t any legal issues that could come up, for example- if your driveway was partially built onto the neighbor’s property. Surveys also pinpoint exactly where there may be any easements, typically for use by utility companies. Survey issues may affect the marketability of the house. If you are selling your house, I take care of ordering the property survey for you prior to the closing.
Selling a home is more than just an exchange of money for keys. The contract that you signed has many moving parts, placing time bound obligations on both buyer and seller. Give us a call at 630-250-8813 and we can take the worry out of your hands and handle all aspects of the real estate closing for you (except for packing. We’ll leave that to you).