Appraisals seem to be getting tougher these days. I think everyone has heard of someone whose home "didn't appraise" (for the contract value). This appraiser has some good tips to help make sure you have a fighting chance of meeting that value! And make sure your real estate agent is on top of it!
How To Prepare for a Home Appraisal
You’ve just signed all of the paperwork for your refinance, handed the loan officer the check for the appraisal, and now you’re wondering what is going to happen next. Good news-the appraisal inspection is painless, and usually takes anywhere from 30-60 minutes to complete. However, there are a few things that you should do to help the process move along as smooth as possible.
Preparing for the appraisal inspection:
- Create a detailed list of the recent improvements, which should include the following: when completed, cost of the improvement, before and after pictures if available.
- Make sure each room is accessible; the appraiser is required to inspect each room.
- If there is a crawl space, this area will also have to be made accessible for inspection for an FHA appraisal.
- Give the appraiser room to do their job. Errors are more likely to occur when the appraiser isn’t able to concentrate on their inspection.
- Keep all pets restrained. I’ve been bitten twice by a dog, and once by a cat; the owners had assured me that their pets were friendly-not so much!
- If you live within a development that has a homeowners association, have the name and phone number of the contact person available, along with a fee statement.
- If the appraisal is for an FHA loan, then the area leading to the attic will have to be cleared and made accessible-the appraiser is required to make at least a head and shoulders inspection of the attic area.
- Walk through each room and straighten up as if you were getting ready for company to visit. Appraisers are objective and can look past many things, however, the underwriter reviewing the appraisal photos may feel differently.
- Complete any unfinished projects-most appraisals are done “as is”, and any projects that haven’t been completed, will have to be adjusted for within the appraisal report.
- A copy of any agreements regarding easements (shared driveways and/or garages,etc.) should be made available.
Concerns about value:
For years I’ve been a big proponent of developing a relationship with a Realtor. I’m not talking about a real estate agent who happens to be a relative that lives half way across the state. I’m talking about one that does a lot of work within your neighborhood.
By building a relationship with a professional Realtor (this is all they do and they do it well), they’ll be able to give you great insight as to what’s happening within your neighborhood, and they would be glad to let you know what similar homes are selling for.
Once the appraisal is complete:
You have a right to a copy of your appraisal, so ask for it. If you should find any errors or have any concerns, talk with your loan originator. This is hard for borrowers to understand, being that they paid for the appraisal, but the mortgage company is the appraiser’s client, and they can’t discuss the appraisal with anyone else unless given permission.
Trying to understand an appraisal can be like trying to read the “Dead Sea Scrolls,” so ask questions and get clarification when needed-you paid for it!