Prepare for Your Home Appraisal.
Getting your home to appraise for the selling price can be nerve-racking for many homeowners – but with the right preparation and knowing “what” appraisers look at during a real estate appraisal; you don’t have to be a nervous wreck.
Unless you have an all-cash buyer, a visit from your local home appraiser is inevitable. And while the home appraiser operates “independently” – you don’t have to be a wreck about their opinion as long you understand “what” the appraiser looks at when determining your home appraisal.
So here’s the deal. The home appraiser considers a lot of different things (which I will go over) but most of all they will look at the market and condition of your property. And to do a good job – the appraiser will also need to know and understand quite a bit about the construction and maintenance, too!
The Market, Location & Age
Comparable homes that have sold are considered the “market” and the market is one of the biggest considerations for the appraiser. And even though the appraiser has some leeway – you can bet the appraiser will be in line with the comparable homes that have recently sold in your market. But besides the comparable home that has recently sold, the appraiser will also look at and consider a few other things, too!
Lot Size & Property Size
When your home gets appraised – the appraiser knows folks tend to prefer larger homes and larger lots and take both into consideration when appraising your home. Your appraiser will consider the size of your lot and the size of your home. The square footage of the home makes up a large portion and consideration calculating value of the home. Both the size of your lot and home are big factors and important considerations for the appraiser. The more bedrooms and bathrooms will tend to add more value, especially if they are large and accommodating. The appraiser also knows (as for the lot size) that home buyers like the prospect to expand and are more likely to desire a property that will allow this.
Keep in mind – the appraiser gives a copy of the report to the lender providing the buyer with a mortgage. The main point of the appraisal is to make sure the lender (mortgage holder) is lending money on a property that has the necessary equity.
The foundation, walls, and roof are the three major aspects of the functionality and reliability of your home, and the appraiser will take a good look at all three and pay serious attention to them. The appraiser looks for any and all damage to these components as well as defects in the general construction of the home. And a home that has a problem with a foundation or roof can or might make a home inhabitable, and that’s why the appraiser will pay close attention to these.
Even though the foundation, roof, and siding should be in good condition "when appraising your home," the interior of your home is vital, too and just as important to the appraiser.
The condition of your kitchen, bathrooms, flooring, walls, plumbing, electrical, and windows and doors are vital parts of your home. The appraiser will look closely at these and will need to determine whether the conditions are good or poor. The appraiser will also look at and consider the appliances and light fixtures, as well.
Improvements & Additions
The appraiser looks at the cost of the original construction, but also the appraiser will take note of any and all improvements you have made “as well as” the quality of those improvements, too. A new kitchen, new flooring, new appliances, and renovated bathrooms will determine the overall value, as well.
Not only do buyers like quality home improvements, so do lenders. Quality home improvements contribute to the lasting value of the property, and will definitely be an influence in how an appraiser establishes the value of a home!
Additions to your home establish value to an appraiser and the extra things that make your home special add value to your appraisal. A swimming pool, a tennis court and or a sports court will contribute value to your home.
A Clean Home
Do yourself a favor and help the appraiser with those judgments with a presentable home. You want your home to be clean and sparkle for the appraiser. Don’t forget the appraiser is human and will most likely judge your home based on appearance, as well. While there are some appraisers that strictly go by the numbers, there are others that don’t – so have your home looking great because it can make a difference.
Challenging a Low Real Estate Appraisal
There are cases where a home comes in at a value lower than it should be. If you receive a low appraisal, get a copy of the appraisal report and go over it with a fine-tooth comb. Sometimes it just might be a case of the appraiser making a clerical error in their report causing a low value. I’ve seen where appraisers get the square footage wrong and cause the low home value.
If you find no errors in the report, you should also look at the comparable properties that the appraiser used. Are they truly comparable? Sometimes the real estate appraiser isn’t from the area and will use comps they shouldn't.
However, if you can’t get the appraiser to make the necessary corrections there’s a last resort, but there will be an added cost. You can ask the buyer to get another appraisal; I’m sure they will agree as long as let them know you’ll pay for it.