How To Prepare For An Appraisal When Selling Your Home

How To Prepare For An Appraisal When Selling Your Home

What Should I Do To Prepare For An Appraisal?

How To Prepare For An Appraisal When Selling Your Home

One of the most important steps in a real estate transaction is the bank appraisal.  When you’re selling your home, it’s vital that you know how to prepare for an appraisal.

Homeowners who decide NOT to prepare for an appraisal often regret their decision.  The bank appraisal is one of the most common reasons a real estate transaction falls apart!  A bad bank appraisal can often be avoided, if you know how to prepare for an appraisal properly.

In this article we’re going to discuss the best tips to prepare for an appraisal.  Home sellers who know how to prepare for an appraisal greatly increase the chances that the appraisal is successful and the real estate transaction can continue forward!

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What Hurts a Home Appraisal?

If you’re trying to buy or refinance a home, a good appraisal is key. If the appraisal comes in too low, you might not be approved, or you could face higher interest rates. A number of factors can negatively affect your appraisal, including:

  • Deferred maintenance
  • Dated or undesirable finishes
  • Not being up front about needed repairs
  • Comparable properties that are “outliers” (e.g., sold to relatives, under duress, or a foreclosure)
  • Market conditions
  • Appraiser experience

How to prepare for a refinance appraisal

If an appraisal is required, your lender will order one when you apply to refinance. The appraiser will schedule a visit to your home, at which time they’ll briefly inspect your property. Then, they’ll complete an appraisal report containing information about your home, including its value, and deliver the report to you and your lender.

“When the appraiser arrives, they’ll want to walk through your home to observe the quality, condition, type and number of rooms, appliances, fixtures, floor coverings, countertops and more,” Brenan says. “They’ll take note of special features, any remodeling or updating, or if any obvious repairs are needed. He or she may also take photos and measurements of your home, which will be used in their report.”

The appraisal visit generally lasts “only about 15 minutes,” according to Bill Samuel, owner of Blue Ladder Development, an Elmhurst, Illinois-based real estate investment firm. “After the on-site visit, the appraiser typically spends a couple more hours compiling data and comparable sales to complete their valuation report.”

Appraisals during the pandemic

Due to the coronavirus pandemic, an appraiser may conduct an evaluation differently than usual. If they’re allowed to enter your home (depending on local restrictions), the appraiser will likely wear a mask and gloves, and either maintain social distancing from any occupants present or require that everyone else briefly vacate the home.

Alternatively, many lenders lately are accepting either drive-by appraisals, whereby the appraiser only inspects the home’s exterior without going inside, or desktop appraisals in which all of their research is performed remotely with no in-person visit required.

The appraiser or lender will inform you ahead of time as to which approach they’ll take.

Regardless of how the appraisal is completed, there are several steps you can take to lessen the odds of a low valuation:

  • Thoroughly clean and declutter your home’s interior. “Have your home in show-ready condition before the appraiser arrives, just as you would if you were going to sell the property,” Samuel suggests.
  • Tidy up your yard and exterior. “Make sure the lawn is mowed, bushes and trees trimmed, the yard is clean, there are no loose siding boards, gutters or shingles and curb appeal is high,” Ho says. Also, pressure-wash your driveway and exterior.
  • Make minor improvements if necessary. “Add a fresh coat of paint to worn walls and surfaces, have your carpets professionally cleaned, replace run-down appliances or unsightly furniture, repair or replace things like a broken window or door and upgrade your window treatments,” advises Atlanta-based real estate attorney, investor and Realtor Bruce Ailion.
  • Avoid the urge to undergo costly major remodeling, but aim to make a favorable impression. “Appraisers aren’t supposed to care if a house isn’t modernized, but it’s to the homeowner’s advantage if the home is appealing,” Brenan says.
  • Turn on all your lights and open all doors just before the appraiser arrives. This can make your home look more inviting.
  • Be home and be friendly and accommodating when the appraiser arrives. Appraisers are people just like us who enjoy human interaction.
  • Present the appraiser with a list of any special features or improvements you’ve made in the past few years to your home — especially details about major remodeling projects completed, a new roof, windows or HVAC system, updated appliances and added insulation. “Don’t try to unduly influence or pressure the appraiser,” Brenan says, “but provide copies of any documentation for work performed on the home, which the appraiser should welcome.”
  • Consider providing the appraiser with fresh comparables in the form of information you gather about recent sales or listings in your neighborhood. “You may have information about a particular sale that’s not readily apparent or obvious to the appraiser,” Brenan says. “But don’t be pushy about offering these details and printouts, or try to steer an appraiser to a desired value.”

What if I Don’t Agree with My Home Appraisal?

Sometimes the appraiser’s value is not only lower than you would like it to be but also lower than you think your home is worth. “An appraisal is just one person’s opinion,” Ailion says. “While this is a trained and educated opinion, as with all professions, there are good and bad practitioners.”

Given the strict federal regulations governing the process, is there anything that you can do about a low appraisal? “If the homeowner does not like the value of the appraisal, they can write a letter of appeal to the lender or AMC, but the chance of an appraiser changing their opinion is very slim unless the homeowner has overwhelming evidence that the value is off,” says Benton.

Your appeal will only succeed if you can show that the appraiser made a significant error, such as listing the square footage or room count incorrectly; disregarding an important amenity such as a pool or spa; or disregarding a comparable sale that might support a higher value while “cherry-picking” a less suitable comparable that would indicate a lower value, says Parsons.

You might also make a case, says Ailion, by pointing out that the comparables used were in an inferior school district or an inferior subdivision that did not have a homeowners association with swimming pools and tennis courts, that all the comparables were distressed or real estate-owned sales, or that they have other negative externalities influencing value, such as being on a busy street.

“Explain why they are different and not equal to yours,” says Ailion. “You must prove something is in error with the comparables selected.”

10 Tips For Preparing For A Home Appraisal

As a Realtor® I have learned a thing or two about

As a Realtor® I have learned a thing or two about preparing for an appraisal. These home appraisal tips are here to tell you how to prepare your home for an appraisal and effective actions for increasing your home appraisal value. I have also included a downloadable home appraisal checklist to prepare for a home appraisal.

1. Don’t Get Your Own Appraisal

First, getting an appraisal before selling your home is a waste of time and money. The only appraisal that matters is the one ordered by the buyer’s lender. Instead, let’s focus on what to do regarding the appraisal that does matter.

2. Cut The Grass

The outside of your home should be well kept. The outside is the appraiser’s first impression of your home. Additionally, the appraiser is going to walk around the yard to view it and the home’s exterior. Make sure the yard is free of any trip and fall hazards. Clean up any dog mess in the yard, too. You wouldn’t want to ruin the appraiser’s day by having him or her step in a pile of doggy-doo.

3. Clean Your House

Cleaning your home is the best thing to do before

Cleaning your home is the best thing to do before a home appraisal. Treat the home appraisal like it is the most important showing because at this point it is. You want the appraiser to have a pleasant experience while appraising your home. This means your home should be neat and clean with everything in its place. No dirty laundry, dirty dishes, or overflowing garbage cans.

4. Staged To Sell

Using what you have, make the space inviting, warm, and desirable. Just like when you were showing the home you want to have a high aesthetic sentiment in the home. This is the feeling of positive vibes you get from seeing and being in a space. Have the lights on, doors open, and the shades and drapes up and open. Do whatever staging you were doing for showings, too.

5. If It’s Broken, Fix It

It is likely by the time you have an appraisal you have already had an inspection and may have agreed to fix some items. For this section, I am talking about fixing open and obvious items. A door handle, a light switch, or some other common item that any visitor would see. If you’re trying to get the top dollar for your house, make the effort and fix anything openly and obviously not working correctly.

6. Easy Access

All parts of the home should be easy for the appraiser to access. This includes scuttling hatches into attics. Some appraisers are more thorough than others. Some loan types require a more thorough review of the home, too. Again, you want the appraiser to have a pleasant experience in your home. Don’t make the appraiser have to figure out how to access parts of the home.

7. Be A Wallflower

If you decide to be home and present during the appraisal try not to interfere. Guess what…it’s not the appraiser’s first day. He or she knows what to do. The appraiser does not want you to take them on the dime tour, talk their ear off, or anything else. Be courteous and just let the appraiser complete the task at hand.

8. List Meaningful Updates

Home appraisers do care about meaningful updates,

Home appraisers do care about meaningful updates, and these will increase your home’s appraisal value. Communicate these updates by leaving a list of updates where the appraiser will find them. Note to the appraiser that he or she can take it with them. Also, include invoices for the work.

The careful part of this comes here. The appraiser really doesn’t care that you bought a $50 bag of grass seed and put it on the lawn last year. Instead, focus on more meaningful items. A recent kitchen or bathroom remodel, a new roof, new HVAC equipment, a new water heater, a recent interior or exterior paint job that covered 50% or more of the home. These are meaningful updates that can push the value needle upward. Include invoices if you have them. Do not put down budgetary figures from work you did yourself or estimated values.

9. Make The Appraiser Aware Of Multiple Offers

Let the appraiser know if your home received multiple offers at the same time. If you are working with a real estate agent your agent will most likely take care of this for you. If you are selling your home FSBO print out the other offers and leave copies of those for the appraiser.

10. Don’t Run Comps Or Provide Examples Of Comparable Home Sales

I’m going to keep this really short to prove my point.

How about I show up at your job tomorrow and tell you how to do it despite the fact I have never done your job for a day in my life? That doesn’t feel good, does it?

Yep, that’s what I thought. Don’t try to run comps and give those to the appraiser.

7. Do Some Last-Minute Preparations

On the day of your appraisal, you’ll want to do everything that you can to help your appraisal go smoothly – you can even attend your own appraisal, which is one of the main differences between a refinance and a purchase appraisal.Here are some things you can do a few days before your appraisal and on the big day to maximize your home’s value.

  • Ensure you have the day off work. Check your schedule and make sure you’ll be able to be home for your appraisal. Can’t get that day off? Appoint a spouse or trusted family member to help guide the appraiser.

  • Make plans for children and pets. Children and pets can be a distraction. Arrange for children to be out with a family member or friend on the day of the appraisal or quietly playing in a bedroom or playroom. On the day of your appraisal, make sure that pets are in their carriers or crates.

  • Write down a few notes to jog your memory. You’ll want to make sure that your appraiser sees all of your home’s best attributes. However, it’s normal to forget what you want to show them if you don’t write it down. Make a short list of your home’s most charming points and keep it on you when the day arrives.

  • Do some light cleaning. Tidy up on the morning of your appraisal. Remove smelly garbage and wipe down your countertops. Put away books, clothing and anything else that’s out of place.

  • Set your thermostat to a comfortable temperature. This can help your appraiser subconsciously associate your home with comfort. It also makes testing the heating and cooling systems a bit easier.

3. Create A File Detailing Your Improvements

Upgrades and improvements increase the overall value of your home. Make things a bit easier for your appraiser by compiling a file with proof of all the work you’ve done on the house since you moved in. Did you add a central cooling system? Replace the windows? Add a privacy fence to your backyard? Include sales receipts, paid contractor invoices and zoning permits if applicable. This helps your appraiser know where to look when they consider your upgrades.

Keep in mind that only permanent upgrades you’ve made to your home will count toward your appraisal value. Generally, if you can take something you’ve added along with you when you move out, it won’t count toward your appraisal. Purely aesthetic choices (like painting your living room walls) won’t add to your value. Making your home look nice and feel larger can subconsciously impact your appraiser’s assessment.

Clean and Repair: Preparing for a Home Appraisal

To get the best possible appraisal value, you want to make sure your home is in tip-top shape. Ideally this would mean your home is completely up to date, both structurally and through design, meaning expensive renovations. But that’s not very realistic, and the return on investment may not live up to expectations. Instead of taking on a major project, there are a number of small things you can do to improve your appraisal value, including:

  • Mow the lawn and trim any hedges or outdoor plants that need maintenance
  • Sweep the sidewalk and front steps
  • Wash the windows and replace broken screens
  • Make sure doors open and close without sticking, and ensure all locks are working properly
  • Clean and declutter each room
  • Touch up any peeling paint and remove scuff marks from the walls
  • Schedule an appointment with an electrician to get a maintenance check done for all your electrical wiring
  • Repair broken appliances that will stay with the home
  • Make sure all your heating systems are in good working order
  • Make sure smoke and carbon monoxide detectors are working properly
  • Ensure that your heating devices and cooling appliances like your air conditioning unit are in working order
  • Fix any roof or gutter problems – check for loose or missing tiles, look in the attic for leaks, clean your gutters, etc.

If you’re able, look at previous appraisals on your home and see what brought down the value of the property in the past. If you can address those issues specifically, you’ll have a better chance at a higher appraisal value.

Refinance

Refinance your existing mortgage to lower your monthly payments, pay off your loan sooner, or access cash for a large purchase. Use our home value estimator to estimate the current value of your home. See our current refinance rates and compare refinance options.

Concluding the Appraisal Meeting

It is the supervisor’s responsibility to ensure that there are no surprises at appraisal time. You should discuss positive performance and areas for improvement throughout the year. It is in the employee’s best interest to open up discussion about performance during the year so being open to these conversations is important. The sooner employees know where they are with regard to performance, the sooner priorities can be shifted or problems can be fixed. Communication is a shared responsibility.

Final Thoughts

The appraisal is one of the most important steps in a real estate transaction.  It’s extremely important that you know exactly how to prepare for an appraisal, otherwise you’re potentially building some major roadblocks!

The above tips to prepare for an appraisal are all fairly simple, don’t cost a ton of money, and shouldn’t suck up a ton of your time.  If you decide these tips aren’t important, you might be kicking yourself after the appraisal is completed.

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