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Renovated Chicago home kitchen listed for sale with unpermitted work
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Homeowner Guides & TipsResidential Appraisal
How to Sell a House With Unpermitted Work in Chicago

I was appraising a home in Bucktown last month. Beautiful renovation: open kitchen, custom cabinetry, new bathrooms, updated electrical. None of it had ever been permitted. So can you sell a house with unpermitted work? Yes, but not at the price her broker had assumed, and not to every buyer.

When unpermitted work surfaces during an appraisal, four things happen at once. The appraiser must disclose it. The lender’s underwriting shifts. The buyer pool narrows. And the seller lands in a conversation nobody planned for. Here is how each plays out, and what to do before the appraisal is ordered.

By the end of this article, you’ll know:

  • How appraisers and lenders are required to treat unpermitted renovations
  • How Chicago’s retroactive permit process works, and what it costs in time
  • Three pricing strategies for listing a home with unpermitted work

What Happens When You Sell a House With Unpermitted Work

The appraiser cannot look away. Under USPAP and the Fannie Mae Selling Guide B4-1.3-05, an appraiser who identifies unpermitted additions or improvements must comment on the quality and appearance of the work. Then they must assess its effect, if any, on market value.

That analysis turns on three questions. Was the work done in a workmanlike manner, with sound structure and materials that match the neighborhood? Would a typical buyer in this market accept it, or treat it as a negotiating problem? And if the work had to be permitted retroactively or removed, what would that cost?

Unpermitted work is not automatically excluded from value. A skilled renovation, typical of the market, may contribute close to its full worth. A poorly executed one may contribute very little. But either way, it gets analyzed and disclosed. Our residential appraisers see this in Chicago constantly, and the sellers who fare best are the ones who knew before the report landed.

How Different Lenders React to Unpermitted Work

Financing programs do not treat unpermitted work the same way, and this is where the buyer pool starts shrinking.

Fannie Mae and Freddie Mac will generally finance a property with unpermitted work once the appraiser has addressed quality and market impact. The space can even count toward gross living area if it is workmanlike and typical for the market. Individual lenders may layer on stricter overlays.

FHA is tougher. The property must meet the Minimum Property Requirements in HUD Handbook 4000.1. Significant unpermitted work can push the appraisal to “subject to” status, meaning the loan cannot close until the work is permitted or corrected. VA loans follow a similar pattern under their own property requirements.

Cash buyers face no lender rules at all. They simply use the unpermitted status to negotiate the price down. So a home with substantial unpermitted work often ends up competing for cash buyers and flexible conventional borrowers, while government-insured buyers drop out entirely.

The Chicago Retroactive Permit Process

For many sellers, permitting the work after the fact is the cleanest fix. The Chicago Department of Buildings handles it in a recognizable sequence: application, plan submission, plan review, inspection, correction of any deficiencies, then permit issuance.

The plans are usually the first surprise. Electrical, plumbing, and structural work typically require professional drawings of what was already built, which means architect or engineer fees before the city sees anything. The second surprise is the inspection. The completed work must meet current code, so older wiring, unvented plumbing, and unsupported structural changes all trigger correction orders before the permit issues.

Plan for roughly two to four months on a typical residential project, longer when corrections stack up. Costs run from a few thousand dollars for simple work to far more when code fixes are required. Chicago also charges more for work started without a permit, and fines can apply on top. Worse, if the city discovers the work before the seller addresses it, a stop-work order can freeze everything mid-transaction.

Three Ways to Price a Home With Unpermitted Work

Brokers have three workable strategies, and each trades money for time in a different direction.

The first is pricing at unpermitted market value. List at what the property is worth given its actual permit status. This attracts cash and flexible conventional buyers immediately. It is the fastest path to closing and the lowest number.

The second is permitting before listing. The seller completes retroactive permitting first, then lists a fully documented property to the entire buyer pool at full market value. It usually produces the best financial outcome, if the seller can absorb the months of delay and the upfront cost.

The third is disclosing and negotiating. List near full market value with the unpermitted status clearly disclosed, then handle it through price reductions or credits during the deal. This approach is common. It also produces the most extended escrows and the most collapsed contracts, because the buyer’s lender gets a vote.

Ask About Permits Before the Listing Agreement Is Signed

The intake walkthrough is where this problem should surface, not the appraisal. Ask every seller: What has been renovated since you bought the home? Which projects had permits pulled, and do you have the final inspection approvals? Was anything done by a prior owner? Has the electrical panel been upgraded, plumbing rerouted, or rooms reconfigured?

If the answers point to unpermitted work, the broker can recommend retroactive permitting, adjust the pricing strategy, or walk away from the listing. The one option that fails is assuming the appraisal will not catch it. A pre-listing appraisal answers the value question before a lender’s appraiser answers it for you, and it gives the seller real numbers to choose a strategy with.

Listing a Home With Unpermitted Work?

A pre-listing appraisal from PahRoo tells you what the property is worth as it stands, and what permitting would change, before a buyer’s lender decides for you.

Get a Pre-Listing Appraisal

Frequently Asked Questions

Can you sell a house with unpermitted work in Chicago?

Yes. Unpermitted work does not block a sale, but it must be disclosed, the appraiser must analyze it, and some financing programs will not close until it is permitted or corrected. The practical effect is a smaller buyer pool and pricing pressure.

Does unpermitted work count in the appraised value?

Sometimes. Fannie Mae guidance lets appraisers give value to unpermitted improvements that are workmanlike and typical for the market. Poor-quality work may contribute little or nothing. The appraiser must comment on the work and its market impact either way.

Will FHA finance a home with unpermitted renovations?

Only if the property still meets FHA Minimum Property Requirements under HUD Handbook 4000.1. Significant unpermitted work often makes the appraisal “subject to” repairs or permits, which delays or blocks closing until resolved.

How long does a retroactive permit take in Chicago?

Plan for roughly two to four months on a typical residential project. The timeline covers application, professional drawings, city plan review, inspection, and any code corrections. Complex projects or required repairs extend it.

Should a seller permit the work before listing or just disclose it?

Permitting first usually brings the best price because the full buyer pool returns. Disclosing and negotiating is faster to market but tends to mean longer escrows and lender complications. A pre-listing appraisal quantifies the gap so the seller can decide with real numbers.

Know the Number Before the Buyer’s Lender Does

PahRoo Appraisal & Consultancy provides pre-listing, lending, and litigation-ready real estate appraisal services across Chicago and Cook County, Dallas-Fort Worth, Philadelphia, Phoenix, and Naples. Our team appraises renovated and Chicago-area homes with unpermitted improvements every week. Questions about a specific property? Contact our team or call 773-388-0003.


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Water damage stains on a ceiling flagged during a home appraisal
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Homeowner Guides & TipsReal EstateResidential Appraisal
Water Damage & Home Value: What Appraisers Flag

Water damage has a way of derailing a sale right when things feel like they are going smoothly. A faint ceiling stain might not worry you at all. An appraiser sees it differently, because that stain often hints at a bigger story. Knowing how water damage and home value connect, and what an appraiser flags before closing, puts you a step ahead. You get to handle problems on your own terms, not at the last minute.

By the end of this article, you’ll know:

  • The water-related conditions an appraiser looks for and writes up
  • Why a lender can stall your closing until water problems get fixed
  • What to repair and document before the appraisal happens
How Water Damage Affects Home Value

Most homeowners assume the hit to value equals the repair bill. It rarely works that cleanly. What worries a buyer, a lender, and an appraiser is what the water might have done out of sight. Water travels. A roof leak can rot the sheathing above a ceiling long before any stain shows up. Down in the basement, dampness might point to a grading or foundation issue. And a slow drip under a sink? That can feed mold behind the drywall for months before anyone notices.

That uncertainty is what moves the numbers. A home with visible water damage tends to draw lower offers, repair demands, or a longer stretch on the market. An appraiser’s job, after all, is to capture how the market reacts to what’s in front of it. So we note the visible conditions and weigh how they affect value and saleability.

What an Appraiser Will Notice

We are not home inspectors, and we do not go cutting into walls. But a trained appraiser spots the visible signs of a water problem fast during a standard residential appraisal. The usual flags:

  • Water stains on ceilings and walls
  • Standing water in a basement, crawlspace, or against the foundation
  • A musty smell that says moisture is still hanging around
  • Warped or swollen drywall, baseboards, and flooring
  • Roof leaks, or shingles that have clearly seen better days
  • Grading that sends rainwater toward the house instead of away from it

A lot of this matters because of what tends to follow water: mold. The EPA points out that mold needs ongoing moisture to grow. So a damp crawlspace, or a stain nobody can explain, earns more scrutiny than its size might suggest.

How Water Damage Can Hold Up Your Closing

Water damage can hold up the calendar, too. Lenders, especially on government-backed loans, hold a property to minimum condition standards.. Active water intrusion is one of the more common reasons an appraisal comes back “subject to repair.”

Once that happens, the lender usually wants it fixed and re-checked before the deal can close. Even a small repair can push your closing date back a week or two. Worse, when it only turns up at the appraisal, that lost time becomes the real cost for anyone working to a firm contract date.

Old Damage Reads Differently From Active Damage

Not every water stain carries the same weight. The question an appraiser really cares about is whether the source got fixed.

Picture a leak you repaired last spring. You replaced the ruined drywall and kept the receipts. In that case the worry mostly evaporates, because you can prove the problem is behind you. Now picture a fresh stain, a corner that’s still damp, and no paperwork. An appraiser has to treat that as a live issue, and so will the buyer.

What to Do Before the Appraiser Shows Up

A few moves keep a water issue from running your whole sale:

      1. Fix the source, first and always. Scrub a stain without stopping the water and it comes right back, usually at the worst possible moment.
      2. Keep the paperwork. Invoices, contractor notes, inspection reports. Good documentation answers the appraiser’s question before anyone asks it.
      3. Repair what shows. Swap out stained drywall, ceiling tiles, and warped trim, so nobody is writing up damage you have already handled.
      4. Speak up early. If the house has had a real water event, tell your agent and your appraiser up front. Then everyone plans around the facts instead of a surprise.
Why It Pays to Get Ahead of It

Water damage does not have to wreck your value or your timeline. Most of the harm to a sale comes from the unknowns, like what’s behind the wall and whether it’s still wet. Clear those up and the whole conversation shifts in your favor.

So track down the source, fix it, write it all down, and patch the visible damage before you list. Do that, and a water stain stays a footnote in your sale rather than the headline at your closing.

Worried water could cost you at the closing table?

Find out where your home really stands before a lender or a buyer raises the question. PahRoo delivers independent, defensible appraisals that give you answers, not guesswork.

Request Your Appraisal

Frequently Asked Questions

Does water damage lower a home’s appraised value?

It can, though not on its own. The effect depends on how bad it is, whether you’ve fixed the source, and how nervous it makes buyers. Often the real drag on value is what the damage hints at, rather than the damage you can see.

What does an appraiser look for when checking for water damage?

Visible clues, mostly: stains, standing water, musty smells, warped materials, signs of a roof leak, and poor drainage. An appraiser reports what’s in plain sight and won’t go digging behind walls or running lab tests.

Will water damage stop a home loan from closing?

It can slow things down. A lender may insist that active water intrusion gets corrected and re-inspected first, particularly on government-backed loans with condition standards to meet.

Do I need to fix water damage before selling?

Usually yes, especially when it’s visible or a buyer needs financing. Sorting it out before you list keeps the negotiation calmer and lowers the odds of a delayed closing.

Is old, repaired water damage still a problem for an appraisal?

Much less of one, as long as you fixed the source and have the records to show it. Repaired and documented damage sits in a very different category from something fresh or unexplained.

Need an Independent Appraisal?

Sometimes water damage, repairs, or condition questions cloud what a home is really worth. In those moments, an independent appraisal gives you a credible, well-supported answer before you negotiate or finance.

PahRoo Appraisal & Consultancy, LLC helps homeowners, attorneys, accountants, bankers, and real estate professionals make confident decisions. Whether you’re preparing to sell, settling an estate, removing PMI, navigating a divorce, or weighing how a property’s condition affects value, our team is ready to help.


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Mold remediation work completed before selling a home
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Homeowner Guides & TipsResidential Appraisal
How Mold Affects a Home Appraisal and Sale

Mold has a way of turning a smooth home sale into a tense negotiation. A small patch in a bathroom rarely sinks a deal. Visible growth spreading across a ceiling is a different conversation. If you’re getting ready to sell, knowing how mold affects a home appraisal helps you stay ahead of the questions buyers and lenders are about to ask.

By the end of this article, you’ll know:

  • Whether mold actually pulls down your appraised value
  • What a lender might demand before clearing the loan
  • How to handle mold before you list, and what to keep on file
How Mold Affects a Home Appraisal

Most sellers picture the cost of cleanup and stop there. The bigger issue is what mold usually signals. It points to moisture, and moisture points to a cause: a roof leak, a plumbing problem, poor ventilation, or water creeping in through the foundation. So when we spot mold, we start wondering what’s behind it.

That uncertainty is what worries buyers and lenders. A home with obvious mold often draws lower offers, or sits on the market longer than a comparable place with no moisture history. An appraiser’s job, after all, is to reflect how the market reads a property. So we note what’s visible and weigh how it affects value and sale ability.

What an Appraiser Will Notice

We are not mold inspectors, and we do not take air samples or open up walls. But during a standard residential appraisal, the visible signs of a moisture problem are hard to miss. The usual flags:

      • Visible mold on walls, ceilings, or around windows
      • Water stains and discolored patches
      • A musty smell that lingers in a room
      • Warped or damaged drywall
      • Signs of past leaks that were never fully sorted out

Much of this matters because of where mold leads. The EPA explains that mold needs steady moisture to spread. So a musty basement, or a stain nobody can account for, pulls more attention than its size might suggest.

How Mold Can Hold Up Your Financing

Mold can cost you time as well as money. Lenders watch closely for anything that reads as a health or safety concern. If visible mold turns up while a buyer is financing, the lender may pause and ask for more before clearing the loan.

That might mean remediation records, proof of repair, an extra inspection, or a professional evaluation. Each step adds days. Worse, when it all surfaces at the appraisal rather than earlier, the delay can put a contract date at risk.

Should You Remediate Before Selling?

There’s no single answer, because every house is different. Still, in most cases where the mold is visible or a buyer needs financing, dealing with it before you list pays off. It keeps the negotiation from collapsing into a fight over repairs, and it clears away a common reason for loan delays.

A few questions help you decide. How widespread is it? Have you fixed the moisture source, or only wiped away what you could see? Would a buyer notice it on a walkthrough? Could it trip up financing? Whatever you choose, hold on to the records. Good documentation reassures a buyer far more than a verbal “it’s been handled.”

A Word on Disclosure

Disclosure rules shift from state to state, and sometimes town to town. In a lot of places, sellers have to disclose known material defects, and mold can fall into that bucket. Hiding a known problem tends to create much bigger headaches later in the deal.

So before you list, get clear on what your state requires. When in doubt, ask a qualified agent or a real estate attorney. Being upfront builds trust, and it heads off arguments after closing.

What to Do Before the Appraiser Arrives
      1. Fix the moisture source first. Clean the mold without stopping the water and it comes right back, often worse than before.
      2. Keep your paperwork. Remediation invoices, contractor notes, inspection reports. Records answer the questions before anyone asks them.
      3. Repair what shows. Replace stained drywall and damaged materials, so nobody is writing up problems you have already solved.
      4. Flag it early. If the house has had a real mold issue, tell your agent and appraiser up front. Then everyone works from the facts.
Why Getting Ahead of It Pays Off

Mold does not automatically wreck a home’s value. What it does is shape how buyers, lenders, and the market see the place, and it can stall a sale when it shows up unaddressed. The real worry usually sits behind the mold: the moisture feeding it and the cost of putting things right.

So track down the source, fix it, document the work, and tidy up the visible damage before you list. Handle it early, and mold stays a manageable line item rather than the thing that derails your closing.

Not sure how mold could affect your home’s value?

Get a clear, independent read before a buyer or a lender turns it into a problem. PahRoo delivers defensible appraisals that show you exactly where you stand.

Request Your Appraisal

Frequently Asked Questions

Can mold cause a low home appraisal?

It can. If mold drags on the home’s condition, its saleability, or buyer interest, that can show up in the value. How much depends on how bad the problem is and how the market reacts to it.

Will an appraiser test for mold?

No. Appraisers aren’t mold inspectors, and we don’t run environmental tests. We will note visible mold or moisture damage if we see it during the walkthrough.

Should mold be removed before selling a house?

Often yes, particularly if it’s visible or a buyer is financing. Clearing it up early tends to steady buyer confidence and head off delays. The right call depends on how widespread it is and your local market.

Does mold affect property value?

It can. Value tracks buyer perception, repair costs, financing worries, and the overall condition of the property.

Can a lender deny financing because of mold?

Sometimes. A lender may ask for remediation, repairs, or an inspection before approving the loan if the mold raises a real health, safety, or condition concern.

Need an Independent Appraisal?

When condition concerns, repairs, or saleability questions cloud what a home is worth, an independent appraisal gives you a credible, well-supported answer before you negotiate or finance.

PahRoo Appraisal & Consultancy, LLC helps homeowners, attorneys, accountants, bankers, and real estate professionals make confident decisions. Whether you’re preparing to sell, settling an estate, removing PMI, navigating a divorce, or weighing how a property’s condition affects value, our team is ready to help.


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Chicago home appraisal report deciding loan approval and interest rate
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Homeowner Guides & Tips
How a Chicago Home Appraisal Shapes Your Loan Approval and Rate

Your lender does not lend against the price you agreed to pay. It lends against the collateral, and the Chicago home appraisal is where that collateral gets a number. That one number flows into your loan-to-value ratio. Then the ratio drives approval, pricing, and whether mortgage insurance joins your payment. So the appraisal is not a formality standing between you and the closing. It is the document your whole loan is built on, and understanding it pays in actual dollars.

By the end of this article, you’ll know:

  • How one appraised value moves your LTV, your PMI, and your rate.
  • What your options are when the value comes in low.
  • The copy of the appraisal you are entitled to, with the deadline.

Why One Number Drives the Whole Loan

Lenders size a mortgage against the lower of price or appraised value. That rule is the whole game. When the appraisal matches or beats the price, nothing changes and nobody notices. When it comes in below the price, the lender recalculates everything off the smaller number. Then the gap becomes your problem to solve.

Run the arithmetic once and it sticks. Say you agree to pay $400,000 with 10% down, planning a $360,000 loan. Then the appraisal lands at $380,000. The lender now measures your loan against $380,000. So that same $360,000 loan jumps to about 95% LTV instead of 90%. Your choices become familiar ones: renegotiate the price, bring more cash, pay for the higher ratio, or walk. The appraisal did not kill the deal. It repriced it.

Chicago adds its own wrinkle to this math. The city’s blocks mix vintages and property types, so appraised values swing more between neighborhoods than in cookie-cutter markets. For example, two buyers borrowing the same amount can face different LTV realities a mile apart. That is one more reason to know the likely value early, before the contract locks the price in.

Chicago Home Appraisal Math for LTV, PMI, and Rate

Loan-to-value is the share of the value you are borrowing. Also, underwriting treats it as a core risk input. So a lower LTV generally earns friendlier pricing, while a higher one costs you. Mortgage insurance follows the same line. Per the CFPB, PMI may be required on a conventional loan when the down payment is under 20% of the purchase price. So a full 20% down avoids it. On a refinance, the same 20% threshold applies to your equity. So the appraised value decides whether you clear it.

Notice what that implies for refinancers. You are not buying anything, yet the appraisal still sets your equity percentage, your rate tier, and your insurance requirement. A strong, well-documented value can be the difference between a refinance that works and one that does not.

If the Value Comes In Low

A low appraisal is information, not a verdict. Start by reading the report. For example, you may spot something concrete: a comparable from the wrong buyer pool, a missed renovation, a square-footage error. Lenders have a reconsideration of value process for exactly that, and it runs on evidence, not disappointment. Better comps carry those requests, so it helps to understand how appraisers choose and adjust them. Meanwhile, the deal-level options stay on the table. Renegotiate with the seller, split the gap, or bring additional cash to keep the LTV where pricing needs it.

The Copy of the Appraisal Is Yours

Borrowers have a documented right here, and it is worth using. Per the CFPB, a first-mortgage borrower is entitled to copies of the appraisals and value opinions the lender obtains. The timing is specific: soon after the lender receives the complete report, and no later than three days before closing. Also, the copies are free. Read yours before closing day, not after. After all, every option in the section above depends on catching problems while there is time to act.

How to Prepare for the Appraisal

Preparation will not inflate your value, but it keeps real value from being missed. Make every room accessible. Then put your improvements on paper: what was done, when, and roughly what it cost. A dated list beats a memory at the front door. Fix the small, visible defects that read as neglect. For the full walkthrough of what happens and when, our home appraisal process guide covers the timeline step by step.

Walk Into the Loan Knowing Your Number

The pattern across all of this is simple. The appraisal decides the number, and the number decides the loan. So the buyers and refinancers who do best treat the value as something to understand early instead of something to hope about late. Know the arithmetic and read the report you are entitled to. Then, when the stakes justify it, get an independent read before the lender’s number surprises you.

What if the lender’s number isn’t your number?

A pre-purchase or pre-refinance appraisal tells you the value before the loan depends on it.

Know My Value First

Frequently Asked Questions

Who orders the appraisal for a mortgage?

The lender orders it, typically through an appraisal management company. That keeps the valuation independent of everyone with a stake in the price. The borrower usually pays for it as part of loan costs. Also, on a first mortgage the borrower is entitled to a copy of the report.

Can I challenge a low appraisal?

Yes, through your lender’s reconsideration of value process. It works when you bring evidence. That means stronger comparable sales, documentation of improvements the report missed, or factual errors like square footage. A complaint without data rarely moves the number.

When do I get my copy of the appraisal?

Per the CFPB, a first-mortgage borrower should receive copies soon after the lender gets the complete report. The deadline is no later than three days before closing. The copies are free. Read the report before closing so any problem surfaces while you can still act.

What does the appraisal have to do with PMI?

PMI on a conventional loan follows the 20% threshold: under 20% down when buying, under 20% equity when refinancing. Also, the appraised value is what your equity gets measured against. A different value can put you on the other side of that line in either direction.

Is a pre-purchase or pre-listing appraisal worth it?

When the price is unusual, the property is hard to comp, or the financing is tight, yes. An independent appraisal before the lender’s tells you what number the deal is likely to meet. That beats finding out mid-transaction with earnest money on the table.

The Independent Number in Your Loan File

PahRoo Appraisal & Consultancy has appraised Chicago-area homes for over two decades. An appraiser holding both MAI and SRA designations leads the firm. Maybe your purchase needs a residential appraisal before the lender’s number lands. Maybe a refinance, estate, or dispute calls for broader appraisal services. Either way, you get a documented value with the evidence attached, readable by you and by the underwriter.


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Appraiser comparing unlike homes to find comparable sales
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Homeowner Guides & Tips
How Appraisers Compare Homes That Aren’t Alike

No two homes are the same, yet every appraisal has to land on one number. So how appraisers compare homes that are not alike is less mystery than method. Appraisers call the method the sales comparison approach. It runs on two moves: picking the right comparable sales, then adjusting for the differences that remain. Understand those two moves and most “why did it appraise there?” questions answer themselves.

By the end of this article, you’ll know:

  • How appraisers choose comps, and why the nearest sale can lose out.
  • How dollar adjustments work, including which property gets adjusted.
  • What happens when a home has no close matches at all.

Where Comps Come From

A comp is a recent sale a buyer would have weighed against the subject home. Three filters do most of the sorting. Recency comes first, because last year’s market is not this year’s market. Location comes next, and it means market area, not just distance. Then comes similarity: style, size, age, condition, and lot.

Chicago makes this interesting. A brick bungalow, a frame two-flat, and a new infill build can share one block. Still, they belong to three different buyer pools. So an appraiser may skip the sale next door. Instead, the right comp may sit three streets away, in front of the same buyer pool. That choice is not cherry-picking. It is the whole point of the exercise.

Sources matter here too. Appraisers pull closed sales from the MLS and public records, then verify the details that photos hide. A sale with seller credits, or an off-market deal between relatives, can look like a comp and behave like a trap. For instance, a $400,000 sale with $15,000 in concessions did not really trade at $400,000. So verification keeps those numbers from skewing the comparison.

How Appraisers Compare Homes That Differ

Once the comps are chosen, differences remain. Adjustments translate those differences into dollars. Here is the part most people get backwards: the adjustment lands on the comparable, not on the subject. The question is always the same. What would this comp have sold for if it matched the subject?

A quick illustration shows the direction. Say a comp sold for $420,000 with a renovated kitchen, and the subject’s kitchen is original. The comp’s buyer paid something for that kitchen. So the appraiser adjusts the comp’s price downward to strip that advantage out. If the subject instead has the better feature, the comp adjusts upward. Run that logic across every meaningful difference and each comp produces an indicated value for the subject. The appraiser then weighs those indications, leaning hardest on the comps that needed the least adjusting.

What Moves the Number Most

Not every difference earns an adjustment. Appraisers adjust for what the market pays for, and the market is not sentimental. Location factors like school boundaries, transit, and busy streets tend to matter. So do livable square footage, bed and bath count, condition, and functional layout. Meanwhile, the $60,000 kitchen does not automatically return $60,000. We cover why in our guide to which property updates add value. Cost and value are different numbers, and adjustments track the second one.

Support for each adjustment matters too. Appraisers extract adjustment amounts from the market itself, by comparing sales that differ in just one feature. That discipline separates an appraisal from an estimate. Also, it is the standard that professional bodies like the Appraisal Institute train and credential for.

When There Is No Good Comp

Some homes break the easy version of the method. A rehabbed loft in a neighborhood of frame houses. The one oversized lot on the block. A home twice the size of anything nearby. For these, the appraiser widens the search in geography and in time. Then the goal is bracketing: at least one comp superior, at least one inferior. So the value lands inside a defensible range instead of hanging off one data point.

This is also where automated estimates struggle most, because an algorithm cannot tell which unlike homes are still comparable. We covered that gap in detail in our Zestimate versus appraisal breakdown. The harder the property is to match, the more the value depends on judgment. That judgment is exactly what you are hiring.

Comparison Is a Method, Not a Guess

So the answer to the question in the title comes down to this. Appraisers compare unlike homes in three steps. First, they select the sales a real buyer would have considered. Then they adjust those sales for measurable differences. Finally, they weigh the results by how much adjusting each comp needed. Every step leaves a paper trail. That is why a credible appraiser can explain the report line by line. So a number nobody can explain should make you ask better questions. For residential appraisals across Chicagoland, that paper trail is the product.

Two homes, same block, $40,000 apart. Why?

Get a valuation built on the right comparables, with every adjustment explained.

Request My Appraisal Quote

Frequently Asked Questions

How do appraisers pick which homes to use as comps?

By asking which recent sales a buyer would have treated as real alternatives to the subject home. Recency, market area, and similarity in style, size, age, and condition drive the choice. The appraiser skips the nearest sale when it belongs to a different buyer pool.

What is an appraisal adjustment?

A dollar amount that accounts for one difference between a comp and the subject property. Condition, square footage, and lot size are typical examples. Appraisers extract adjustments from market evidence rather than a chart.

Does the appraiser adjust my home or the comparable?

The comparable. Each comp’s sale price gets adjusted to answer one question. What would it have sold for if it matched your home? If the comp has the better feature, its price adjusts down. If your home has the better feature, the comp adjusts up.

What happens if no similar homes have sold nearby?

The appraiser widens the search area and the time window. Then the subject gets bracketed with at least one superior and one inferior comp, so the value sits inside a supported range. Unusual properties take more work, not less accuracy.

Will a renovated kitchen raise my appraisal by what it cost?

Usually not dollar for dollar. Adjustments reflect what buyers in your market actually pay for the feature. That can be more or less than its cost. Cost and market value are related but different numbers.

Appraisals Grounded in the Right Comparables

PahRoo Appraisal & Consultancy appraises residential and commercial property across Chicagoland, with offices serving Dallas, Philadelphia, Phoenix, and Naples. An appraiser holding both MAI and SRA designations leads the firm. Every report documents the comps chosen, the adjustments made, and the evidence behind them.


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Chicago Housing Smart Market Signals August 2025

Chicago housing market Aug 2025 update: buyers are gaining leverage as inventory rises and sales momentum cools across Cook, DuPage, Lake, and Will Counties. If you’re planning to buy, sell, or invest, this month’s numbers point to real opportunities.

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Chicago Housing at a Glance for August 2025
  • Buyer advantage grows: Pending sales are down year over year across all four counties, easing competition.
  • County differences matter: DuPage remains the strongest on pricing, Cook offers the most affordability, Will shows the largest inventory build.
  • Condo stability in the city: Cook County condo inventory has tightened compared with last year, contrasting with suburban trends.
  • Rates keep pressure on budgets: The 30-year fixed hovers in the mid-6% range, moderating demand but opening room to negotiate.

County Snapshots
Cook County

Most affordable entry point. Median list price around the mid-$300Ks, with the largest share of total inventory in the metro. Condo inventory has declined year over year, making the attached market comparatively tighter for buyers.

DuPage County

Strongest pricing resilience. Median list price leads the region. Inventory has contracted versus last year, keeping competition relatively firm for well-presented homes.

Lake County

Balanced but steady. Pending activity shows smaller year-over-year declines than Cook or DuPage, signaling relatively stable demand in select submarkets.

Will County

Most selection for buyers. Active inventory is up sharply year over year while absorption cooled. Sellers should price to the market and prepare for longer days on market.

Mortgage Rates & Affordability

With the 30-year fixed around 6.58%, monthly payments remain elevated versus the recent past. For prepared buyers, this environment can translate to less bidding pressure and better terms.

What This Means for You

  • Buyers: Compare more homes, negotiate repairs/credits, and lock financing proactively.
  • Sellers: Price right from day one; consider strategic concessions instead of later price cuts.
  • Investors: Normalizing conditions after 2020–2024 create more rational entry points.

Why an Appraisal Matters Right Now

In a shifting market, precise value is your edge. A professional appraisal from PahRoo Appraisal & Consultancy, LLC gives you a data-driven view of true market value before you list, bid, refinance, or strategize.

Explore Residential Appraisal Services  |  Investor Consulting Solutions  |  Contact PahRoo

FAQs

Is Chicago a buyer’s market in August 2025?

Conditions tilt toward buyers as absorption rates trend lower and months of supply rise versus last year. Well-priced homes still move, but negotiation power has improved.

Which county is most affordable?

Cook County typically offers the lowest median list price among the four major counties, providing more accessible entry points for first-time buyers.

What should sellers do right now?

Lead with market-right pricing, optimize presentation, and consider targeted concessions (closing credits or repair budgets) to protect your timeline and net.

Need clarity before you act? Book an appraisal with PahRoo to move forward with confidence in the Chicago housing market Aug 2025.

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Homeowner Guides & TipsResidential Appraisal
How Mortgage Rates Move the Housing Market

A year ago, the average 30-year mortgage ran 6.34%. As of early October 2026, it runs 7.28%. So every article written last year about rates easing and buyers returning aged badly, and any piece written today about rising rates will age the same way. Mortgage rates change direction faster than content does. What never changes is the mechanism, how rates move budgets, supply, and prices, and that is the part worth understanding before your next move.

By the end of this article, you’ll know:

  • What one point of interest does to a real monthly payment.
  • Why the lock-in effect keeps supply tight in both directions.
  • Why appraisals carry an effective date, and why that date matters more when rates move.

What Mortgage Rates Do to a Monthly Payment

Start with the arithmetic, because buyers shop payments, not prices. Take a $400,000 home with 20% down, so a $320,000 loan. At the current 7.28% average from Freddie Mac’s weekly survey, principal and interest run about $2,189 a month. At last year’s 6.34%, the same loan cost about $1,989. So roughly one point of rate moved the payment about $200 a month, which is $2,400 a year, every year, for decades.

Now flip the math around, since that is how the market experiences it. A buyer with a fixed monthly budget qualifies for less house when rates rise and more when they fall. Multiply that across every buyer in a market and rates become a dial on total demand. Sellers feel it as traffic. Appraisers see it next, in what the comps start closing at.

Sellers can run the same math in reverse. If your likely buyer could stretch to $450,000 last fall, this fall the same buyer stretches to something less. The house did not get worse. The financing did. Appraisers watch this shift arrive in the comps within a quarter or two. So pricing against last year’s sales quietly prices against buyers who no longer exist.

The Lock-In Effect Holds the Keys

Here is why higher rates have not produced cheaper houses in most markets. A huge share of current owners hold mortgages far below today’s rates, and trading a low payment for a high one is expensive even in a sideways move. So many would-be sellers simply stay put. That keeps listings scarce, and scarce supply supports prices even while higher rates squeeze demand. Both blades of the scissors moved, so the paper barely got cut.

The lock-in effect is also why national doom headlines keep missing. Analysts keep waiting for a flood of listings that locked-in owners have no reason to supply. Until their math changes, the flood stays theoretical, and tight markets like Chicago stay tight.

The effect also explains what happens when rates fall. Each step down releases some locked-in owners, so supply and demand tend to rise together rather than demand alone surging. We covered the supply side of this in our guide to what rising inventory means for sellers. Rates and supply are the same story told from two ends.

Rates Follow the Ten-Year, Not the Fed

One more mechanism saves a lot of confusion. Mortgage rates track the 10-year Treasury yield far more closely than the Federal Reserve’s benchmark rate. Markets price in expected Fed moves before they happen, so mortgage rates often fall ahead of a cut and sometimes rise after one. Waiting for a Fed announcement to time a purchase usually means arriving after the move already happened. The useful habit is watching the weekly survey itself, not the headlines about meetings.

Why Your Home’s Value Carries a Date

All of this is why a professional appraisal states a value as of a specific date, the effective date. Your home did not change last year, but the buyers who could afford it did, because their budgets moved roughly $200 a month on the average loan. So a value is a photograph of a moving scene, and the date on it matters. For a purchase or listing today, the appraisal reads today’s rate world. For an estate or divorce, a retrospective appraisal can fix the value to a past date, in that date’s rate world, with support that holds up. Local conditions set the rest, and our Chicago market trends hub covers how this metro behaves underneath the national rate story.

Watch the Rate, Act on the Value

So the playbook is short. Buyers: track the weekly average, know your payment at today’s rate, and remember that waiting for a perfect rate often means paying a higher price instead. Sellers: price for the buyers who exist at the current rate, not the ones who existed last spring. And for any decision with money or paperwork attached, get the value fixed to a date by someone qualified to defend it. Rates will keep moving. Your number should stand still long enough to act on.

Rates moved again. Did your home’s value move with them?

An appraisal fixes your property’s value to a date, with the evidence of what buyers can actually pay right now.

Fix My Value to Today

Frequently Asked Questions

What are mortgage rates right now?

As of Freddie Mac’s survey for the week of October 1, 2026, the 30-year fixed averaged 7.28% and the 15-year averaged 6.60%. A year earlier those averages were 6.34% and 5.55%, so rates rose over the year. The survey updates weekly, so check the current edition before acting.

How do mortgage rates affect home prices?

Through buyer budgets. On a $320,000 loan, the move from 6.34% to 7.28% raised the monthly payment by about $200, so buyers with fixed budgets qualify for less house. Prices respond with a lag, and tight supply can cushion them, which is why higher rates slow markets more often than they crash them.

What is the lock-in effect?

Owners holding mortgages far below current rates face a big payment jump if they sell and buy again, so many stay put. That keeps for-sale supply scarce while higher rates squeeze demand, and the two forces offset, supporting prices. Falling rates release locked-in owners gradually, lifting supply and demand together.

Do mortgage rates follow the Federal Reserve?

Only loosely. Mortgage rates track the 10-year Treasury yield, which moves on expectations before the Fed acts. So mortgage rates often drop ahead of an anticipated cut and can rise after one. Watching the weekly rate survey tells you more than watching Fed meeting headlines.

Why do appraisals have an effective date?

Because value depends on what buyers can pay, and rate moves change that month to month. An appraisal states value as of a specific date so the number has a defined context. Retrospective appraisals use the same principle in reverse, fixing value to a past date for estates, divorces, and tax matters.

Values With a Date and the Evidence Behind Them

PahRoo Appraisal & Consultancy has valued homes and buildings through every rate environment for more than two decades. An appraiser holding both MAI and SRA designations leads the firm. Maybe you need a residential appraisal before buying or listing. Maybe an estate or divorce needs a value fixed to a past date through broader appraisal services. Either way, you get a number with a date on it and the market evidence underneath.


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Zoning map overlay demonstrating impact on property values in Chicago
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Homeowner Guides & Tips
How Zoning Changes Your Property’s Value

Zoning might be the most boring subject in real estate, and it quietly outranks almost everything else. Those colored squares on a city map decide what your property can legally become. So they also set a ceiling on what it is worth. Two identical lots on the same street can carry very different values because one allows three units and the other allows one. Most owners never check which lot they own.

By the end of this article, you’ll know:

  • Why appraisers analyze zoning before anything else, through highest and best use.
  • What the research says zoning does to prices, in six-figure terms.
  • How Chicago’s 2025 ADU ordinance redrew value ward by ward.

Zoning Is the First Question an Appraiser Asks

Appraisal doctrine has a name for this: highest and best use. Before valuing a property, an appraiser determines the most profitable use that is legally permissible, physically possible, and financially feasible. Notice, too, which test comes first. Legal permissibility is the zoning question, so everything downstream depends on it. A lot zoned for a single home gets valued as a single home. The same dirt zoned for six units gets valued as a development site, because buyers pay for what they are allowed to build.

So when zoning changes, value can move without a single nail being driven. The use changed, so the buyer pool changed, and the price followed. That is also why appraisers track zoning board agendas and draft map amendments. After all, a variance or a text amendment can rewrite a property’s highest and best use overnight.

The Research Puts Numbers on It

How much can lines on a map matter? Reserve Bank of Australia economists measured it by comparing home prices with the cost of supplying homes, and the Cato Institute’s summary of their study reports the gap. Zoning restrictions raised the average detached house price in Sydney by about $489,000, roughly 73% above the cost of supply. Melbourne’s detached prices ran 69% above supply cost, too, and Sydney apartment prices ran 85% above marginal cost.

So those are restriction effects: scarcity created by what the map forbids. The mirror image is entitlement value, what a property gains when the map loosens. Arlington, Virginia tried exactly that by allowing duplexes in single-family zones, and teardown economics shifted immediately. Then opponents sued, and the fight ran all the way to an appeals court in 2025. Both halves of that story matter to a property owner. Zoning can mint value, and contested zoning can hold it hostage until the courts finish.

Chicago Just Redrew Its Own Map

This is not theory anywhere, and in Chicago it is this year’s news. In September 2025, the City Council unanimously approved an ordinance legalizing accessory dwelling units in areas zoned for small apartment buildings and in business districts, building on pilot zones that date to 2020. Inside those original pilot areas, ADUs are also allowed by right.

Here is the wrinkle an appraiser cannot ignore. In single-family zones, the city’s most common zoning, whether ADUs are allowed depends on the local alderperson. So the same bungalow can hold real ADU potential in one ward and none in the ward next door, a patchwork that changes lot values block by block. The ordinance also requires union apprentice labor for ADU construction, which raises the cost side of the feasibility test. Potential income, ward-level permission, and build cost now all feed one question: what is this specific lot’s highest and best use today?

Zoning Cuts Both Ways

Owners mostly hear the upside stories, but the doctrine is symmetrical. A downzoning can strip development potential a purchase price assumed. A legal nonconforming use, the grandfathered duplex in a single-family zone, can lose its status after a fire or a long vacancy, taking its income value with it. And “zoning potential” that requires a variance is a maybe, not an asset, until the approval exists.

Chicago’s new ordinance shows the whole spectrum at once. If your ward allows ADUs, your garage just became potential income. If it does not, the identical garage one ward over stays a garage. Same city, same ordinance, different values. So before celebrating or shrugging, check where your block actually landed. So buyers who pay full entitlement value for un-entitled land are paying for someone else’s homework before it is graded.

Check the Map Before You Price the Property

So the order of operations matters. Before you buy a teardown, sell a wide lot, or build the addition, find out what the zoning actually permits and what the market pays for that permission. An appraisal does this work formally. The highest and best use analysis establishes the legal envelope, and the valuation prices the property inside it, with the evidence attached. If the zoning also moved your assessment, our guide to Cook County property taxes covers what to do about that. Either way, the map knows something about your property’s value. It is worth reading before the market reads it for you.

Is your lot worth more than your house?

A highest and best use analysis tells you what the zoning really permits and what that permission is worth in your market.

Price the Permission

Frequently Asked Questions

Does zoning affect property value?

Strongly. Zoning sets what a property can legally become, which caps or expands its highest and best use. Research summarized by the Cato Institute found zoning restrictions raised average Sydney detached house prices by about $489,000, roughly 73% above the cost of supply, and similar effects appear wherever rules limit what can be built.

What is highest and best use in an appraisal?

It is the most profitable use of a property that is legally permissible, physically possible, and financially feasible. Appraisers determine it before valuing anything, because the use defines the buyer pool and the price. Zoning is the legal-permissibility test, which is why it comes first.

Can rezoning increase my property’s value?

Yes, sometimes dramatically, because a rezoning that permits more units or new uses changes what buyers can do with the land. The value is only as durable as the approval, though. Contested changes can sit in litigation, as Arlington’s duplex program did, so entitlement value should be priced with its risks.

What happens to value if zoning changes against me?

A downzoning can remove development potential your price assumed, and a grandfathered nonconforming use can lose its protected status after damage or extended vacancy. In both cases the property’s highest and best use narrows, and the value follows it down. An appraisal can quantify the before and after.

How do I find out what my property’s zoning allows?

Start with your city’s online zoning map, which shows the district for each parcel, then read that district’s permitted uses. For decisions with money attached, a highest and best use analysis from an appraiser interprets what the designation permits and what the market pays for it.

Valuation That Reads the Zoning Map First

PahRoo Appraisal & Consultancy has analyzed highest and best use for more than two decades. An appraiser holding both MAI and SRA designations leads the firm. Maybe your question is a residential lot with ADU potential. Maybe it is a development site needing a commercial appraisal, or an estate or dispute needing broader appraisal services. Either way, the analysis starts where the value starts: with what the map permits.


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Homeowner Guides & TipsNewsResidential Appraisal
What Rising Housing Inventory Means for Sellers

Headlines say housing inventory is rising, and nationally that is true. For-sale supply has recovered across much of the South and West, and buyers there have options again. But a seller does not sell into the national market. You sell into your metro, your county, and your block. So before you pick an asking price, look at the local supply picture. A few specific numbers show where you actually stand.

By the end of this article, you’ll know:

  • How supply shifts bargaining power between sellers and buyers
  • The four numbers an appraiser checks before any listing conversation
  • Why Chicago runs against the national trend in 2026, and what that means for your price

How Housing Inventory Sets Your Bargaining Power

Supply decides who negotiates from strength. When few homes compete for many buyers, sellers set terms. When listings pile up, buyers slow down, compare, and ask for more. The 2026 market shows both conditions at once, depending on where you stand. The Realtor.com 2026 Spring Seller Survey found 83% of potential sellers expect their asking price or more. Yet 39% also expect to make concessions, up from 30% a year earlier.

Those two numbers together tell the real story. Sellers remain confident, but they can feel buyers regaining footing where supply has grown. The typical home now spends 57 days on market. A seller who prices past what local supply supports does not just wait longer. They often give the difference back later as price cuts and credits.

The Four Numbers an Appraiser Checks Before You List

You do not need a terminal full of data. Four figures, all available from any good agent or appraiser, describe your local supply picture.

Months of supply. How long current inventory would take to sell at the current sales pace. A common rule of thumb treats roughly six months as balanced. Well under that favors sellers; well over favors buyers.

Days on market. How fast comparable homes go under contract. Falling days signal demand outrunning supply. Rising days mean buyers have alternatives, and your price has to earn attention.

Sale-to-list ratio. What homes actually fetch against their asking prices. Treat this one with care, because the ratio only reflects homes that sold. Our June 2026 Chicago market report walks through how a strong ratio can mislead when overpriced listings simply sit unsold outside the statistic.

New listing flow. Whether fresh competition keeps arriving. Inventory can look tight today and loosen within a season if new listings outpace sales. The direction matters as much as the level.

Chicago Runs Against the National Trend

Here is where geography changes the answer. Realtor.com’s Market Clock analysis found only about a quarter of the 50 largest metros remain seller’s markets in 2026, concentrated in the Midwest and Northeast, while all eight buyer’s markets sit in the South or West. Chicago made the short list of peak seller markets, alongside Hartford and Indianapolis.

So while sellers elsewhere adjust to growing supply, Chicago-area sellers still work with scarce inventory and steady demand. Even here, though, the picture splits by county. Our June report found Cook County prices holding on scarce supply while the collar counties each tell a different story. Two sellers thirty miles apart can face opposite markets in the same month. That is exactly why the national headline, whichever direction it points, should never set your asking price.

A tight market also rewards attention, not complacency. Watch the new listing flow in your area through the spring. If competition arrives faster than homes sell, the advantage narrows, and the sellers who priced on evidence keep their edge while the optimists chase the market down.

Your Tax Assessment Is Not Your Market Value

One more number confuses sellers in this market: the assessed value on the property tax bill. When assessments climb, owners often read the increase as proof their home is worth more. Sometimes it is. But an assessment is a mass-produced estimate for taxation, set on a multi-year cycle, and the City of Chicago’s next citywide reassessment lands in 2027. It is not an offer, and buyers do not pay it.

The gap cuts both ways. A home can sell well above its assessed value in a tight market, or sit unsold below it when the assessment overshoots. If your assessment looks higher than what nearby sales support, that is not a pricing signal. It may instead be grounds for an appeal, which is a separate conversation an independent appraisal can also support.

Read the Market, Then Price the House

Put the sequence in the right order. First, learn what supply and demand look like on your block, not in the headlines. Then find out what your specific home is worth inside that picture. A pre-listing appraisal does both jobs at once. It weighs the local supply data, selects true comparable sales, and gives you a defensible number before the first buyer walks in. In a market where one county favors sellers and the next one does not, that number is the difference between pricing with evidence and pricing with hope.

Is your asking price built on supply data or hope?

A pre-listing appraisal reads your block’s inventory, demand, and comparable sales, then gives you one defensible number to list against.

Get Your Listing Number

Frequently Asked Questions

What does rising housing inventory mean for sellers?

More inventory means more competition and more buyer bargaining power. In 2026, 39% of potential sellers expect to make concessions, up from 30% a year earlier, largely because supply has recovered in parts of the country. Where inventory remains scarce, including much of the Midwest, sellers still hold the stronger position.

What is months of supply, and what number favors sellers?

Months of supply measures how long the current inventory of homes would take to sell at the current sales pace. A common rule of thumb treats about six months as a balanced market. Readings well below six months favor sellers, while readings well above favor buyers.

How is the Chicago market different from the national trend in 2026?

While supply has grown across much of the South and West, Realtor.com’s 2026 Market Clock analysis named Chicago among the strongest seller markets in the country, driven by tight Midwest inventory. Conditions still vary by county, so sellers should check supply data for their specific area before pricing.

Does a higher tax assessment mean my home is worth more?

Not necessarily. An assessment is a mass estimate produced for taxation on a multi-year cycle, not a market price. Homes regularly sell above or below their assessed values. If your assessment exceeds what comparable sales support, it may be grounds for a property tax appeal rather than a higher asking price.

Which numbers should I check before listing my home?

Four figures describe your local supply picture: months of supply, days on market, the sale-to-list ratio, and the flow of new listings. Together they show whether sellers or buyers hold the advantage in your area. A pre-listing appraisal then places your specific home’s value inside that picture.

An Appraisal That Reads Your Block, Not the Headlines

PahRoo Appraisal & Consultancy has valued Chicago-area homes for more than two decades, led by an appraiser holding both MAI and SRA designations. Whether you need a residential appraisal before listing or broader appraisal services for an estate, divorce, or tax matter, we put a defensible number behind the decision so the market’s noise stays outside it.


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