Are you getting your home ready for an appraisal? Either as a sale or for refinancing, you need to make sure you maximize its potential. A low or incorrect appraisal can mean a buyer dropping out, and you need to know how to avoid this at all costs.
Below, we have compiled a list to help you out. Read on for our must-know guide on home appraisal tips.
Compile a List of Upgrades
You can help the appraiser along in their investigations by compiling a list of recent upgrades during a home appraisal. While each renovation or improvement will not correlate directly with a dollar for a dollar price increase, it will go towards improving the decision.
Many of the improvements you have made might not be obvious at first glance to an appraiser. Make sure you put the upgrade, how long ago it was done, and how much you spent.
After this, put in any replacements, such as new HVAC components. Finally, include any recent services or paid maintenance you have undergone.
What Happens During a Home Appraisal?
The purpose of a home appraisal is often so that a lender can assess the value of a home. This makes them know that they are not overlending. In the event the loan applicant does not pay, they need to know they have an asset they can claim back that will cover the loan amount.
The listed price and the appraisal amount are not often the same. In fact, the lender can value the house at a lower value. This will mean your buyer may be offered less of the loan.
In this instance, you will be faced with a cancellation of the sale, or the buyer will make up the difference. However, if you need a quick sale or you are in a buyers market, you should consider meeting them halfway, making the purchase easier for them financially. If they are considering purchasing specialist properties, you may suggest a farmer home loan for a more accurate appraisal.
Know Your Comps
An appraiser will work on their knowledge of comparable properties, also known as ‘comps’. These are homes in similar, local areas that have the same size, number of rooms, features, and amenities. Comparing comps allows you to set a better, more realistic list price, thus increasing the chances of a realistic, satisfactory appraisal.
A real state agent will have look at comps when valuing your house if they are a good one. This is where poor real estate agents can really sour a deal.
If your house is overvalued and manages to sell, then the appraiser needs to know it is actually worth that value and not the listing price. A good real estate agent will be able to give them the prices of comps in the area and rising prices, securing the appraisal.
Clean and De-Clutter
While any decent appraiser will be able to look past this, it always helps to clean and declutter your house. Appraising a house is an art, not a hard, fact-based science and always comes down to preference and personal interpretation a little. Bearing this in mind, creating a great impression suddenly become extremely important.
Work on Your Curb Appeal
Curb appeal is a term used to sum up the first external view people have of your home. This is usually the view they get of the front of the house from the street. Increasing curb appeal can increase the chance of a sale and increase the value of the home.
While the front of a home does not have much bearing on the state of the inside, many people judge it as such. Start with the yard and garden. Make sure your lawn is looking trimmed and lush, and declutter while cutting back overgrown plants and foliage.
Once this is done, work on the facade of the house. Repaints trims and features, and replace any damaged brickwork or fittings like gutters. Finally, check the roof looks respectable and is in fairly good condition.
Check Records & Permits
The most important record you need to check is the square foot of your property. Traditionally, an appraiser will calculate the square foot by hand. In a quicker appraisal, they will use public records to do it.
If the records do not align with the actual square foot space of your property, the appraisal will be lower. Make sure you can address any of the issues way before the appraiser arrives.
Finally, get together any home permits or documentation for your home or improvements you have made. While some may not ask for this, it will speed up the process if they do and stop them from looking at public records which may be dated or incorrect.
Leave the Appraiser Alone
When the appraiser arrives, it is important to give them room to do their job. While you may think you are helping them, you may actually be a hindrance. Your interference may have a negative impact on the appraisal, or you may divulge too much information which leads to a lower valuation.
Start by welcoming them, and being polite and courteous. Offer a cup of coffee, and show them the list of recent upgrades. Then let them carry on to do their job, and inform them where you will be if they have any questions.
Patience & Home Appraisal Tips
These home appraisal tips can help speed the process up, but you should be patient. A lot goes into an accurate home appraisal and it may take time to get the result. If you have followed our tips and your listing is close to market value, you should not have a problem.
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