When you are purchasing real estate, you want to make sure you are paying a fair price. This is especially true in commercial transactions, which typically involve the exchange of significant amounts of money. If the purchase will be financed by a bank loan, proper valuation is not only important to protect your interests, but is a requirement for bank-financed transactions.

Appraisal – The Key to Determining Value

The value of commercial property is determined through a property appraisal conducted by a qualified appraiser. A qualified appraiser is a person who has either been certified by a professional appraisal organization, or has the required education and experience to conduct appraisals in his area of expertise. A real estate agent is not a qualified appraiser (unless he or she also has these certifications), so the sales price he or she sets is insufficient to support the valuation, and should not be relied upon.

Millions of Americans have lost their homes to foreclosure since the 2008 subprime mortgage crisis. And for thousands of former homeowners–including in Illinois–the foreclosure nightmare is ongoing.

After a homeowner defaults on his mortgage payments, the lender files a foreclosure action. The house then becomes subject to a foreclosure sale, the proceeds of which go to the bank. However, a foreclosure sale will not necessarily generate enough proceeds to cover the bank’s expenses (i.e., what the homeowner owes to the bank). Such was the norm after the recent housing crisis.

Now, years later, some lenders are pursuing deficiency judgments to recoup borrowers’ old debts. Specifically, the “deficiency” is the difference between how much the property sold for at auction and the amount that was still due on the loan. Lenders can freeze the borrower’s bank account, garnish his wages and seize his assets in order to recover that difference, or at least a portion of it.

Buying or selling a house can be a stressful process. For those who feel they have found a perfect home, discovering defects after buying the house can sour the dream of homeownership. Similarly, if a seller sells his house and moves on to better prospects, he may find himself pulled back by a buyer suing the seller for defects in the house that the buyer accuses the seller of keeping hidden. In order to avoid these situations, and ensure a smooth transaction, Illinois law has some safeguards in place protecting the seller and buyers.

Illinois Real Estate Law 

In Illinois, the Illinois Real Property Disclosure Act governs the information parties must give or receive when transferring real estate. The Act does not apply to all transfers of property, and includes some exceptions listed in the language of the law.