Tuesday, December 3, 2019 / by Shawna Calvert
Are you putting your house up for sale? If so, your home will likely be appraised during the process. An appraisal is a tool the banks use to provide an estimate of your property's value.
An appraisal is a vital part of selling or buying because it determines how much a lender will let the buyer borrow to purchase the house. In other words, if you and the buyer agreed on a higher price but the home for sale gets a low appraisal, the buyer will never get a mortgage for more than the appraised amount. That's why it's in your best interest to work to increase the appraised value of your home as much as possible.
Don't confuse home appraisal with home inspection. The home appraisal's goal is to determine the property's market value, while home inspection checks the house for flaws and safety issues. If available, the appraiser will consider home inspection findings when determining the home's worth.
The appraiser uses these factors to determine a home's value:
- Neighborhood comparables (the value of houses recently sold and those still on the market in the same area as yours)
- Overall Square livable feet
While there's nothing you can do about the first three, you can improve your property's condition to get a higher appraisal. Here are some tips that will help.
Prepare Important Documents
Make sure you have all the important documents at hand for the appraiser. These documents could include a land survey to prove the property's size, copies of building permits, and a list of any home improvements you've done, complete with receipts. If you have proof of the property's most recent appraised price (such as for a recent refinance), show it to the appraiser too.
Improve Curb Appeal
Making your house, yard and garden look nice is a vital component of a successful sale and a higher appraisal. Clean the debris from the garden, mow the lawn, paint the fence, and give your house and driveway a power wash. If the property exterior requires small repairs such as fixing broken steps, tightening up hand rails, removing older worn yard ornaments, etc., invest in them - these small fixes can add a lot to your initial wow factor and improve your home's value.
Clean and Declutter
One of the easiest improvements you can make to your home is to clean and declutter it! Make sure your house is ready for the appraisal both from the outside and the inside. Give the property a good cleanup, remove and tidy up all the clutter, and contain pets during the inspection. Give special attention to the bathrooms and ensure there are no foul smells. Clear kitchen, dining and bathroom counters completely if possible. Remove area rugs and assure your floors are clean. Make sure your wall hangings are minimal and remove any that are not at adult eye level, this includes bathroom towels. Remove nick nacks, free standing photo frames, magazines, books, baskets of items, shoes, extra blankets and pillows. You want your high traffic rooms to look at spacious as possible so consider removing craft, animal and toy bins. Store the removed items away as tidy as possible. Make sure all light fixtures are in working order and have bulbs with a uniform shade/glow. Mixed lighting can effect mood.
Adding a few minor home improvements can have a positive effect on the appraisal. A fresh coat of paint, shiny new doorknobs, new blinds or new curtains can do the trick.
Tell the Appraiser About Any Home Improvements
Don't be shy to tell the appraiser about all the work you've done to improve the property. Mention any new additions, replaced units, repaired or replaced gutter and shingles, remodeled kitchen, and so on. All these count.
Update the materials
Do you have old and very worn carpet and linoleum? Well, it may be time to get rid of them because they can reduce your home's value. Lets evaluate this topic together, we can help you determine if the costs associated with sprucing up flooring will make a difference for you in the end. You may be surprised how inexpensive flooring improvements can be- but your new home owner may wish to upgrade to another flooring type all together.
It's Not Just About the House
An appraisal counts everything in. Don't hesitate to inform the appraiser about highly rated schools in the area, parks, stores, and public amenities. The appraiser may not be very familiar with your neighborhood, so telling him or her about all the amenities can increase your properties value.
What to Do If the Appraised Value Is too Low
If the appraised value of your home came in way lower than what you've expected, there are ways to appeal the appraisal. Here's what you can do:
- Appeal to the lender and provide all relevant information that proves your home's higher worth. This is called "reconsideration of value".
- Ask for a second appraisal (you'll need to pay for it yourself). Doing this will most likely require the buyer to find a different lender, though.
- Renegotiate with the buyer. You can lower your asking price or suggest that the buyer finds a new lender whose appraisal may be more favorable.
Are you reading this article to prepare to list your home for sale? Get in touch with us and we will walk you through this process. Our experience team is dedicated to help you to get the maximum possible appraisal value for your home.