Avoid Ruining the Home Appraisal by Knowing What to Expect
Avoid Ruining the Home Appraisal with These Tips
A home appraisal is an estimate of the value of a property done on behalf of the mortgage lender. The lender then bases the amount it will lend to a potential buyer on this amount. There are several things that come into play for both the buyer and seller of a home during the appraisal process.
Why an Accurate Appraisal Is Important
An accurate appraisal has ramifications for all parties involved. If you are the buyer, it can affect whether the lender will extend or increase a mortgage. It will also affect your property taxes after you acquire the property.
For the seller, the appraisal will affect your asking price and how quickly your home will sell.
What Do Home Appraisers Look For?
It goes without saying that an appraiser will look at the condition of your home both outside and inside.
The appraiser will check that the structure of the property is sound. Has the landscaping been kept up? Are there any pest issues? Are the roof and windows maintained? If there is a shed or a garage on the property, the condition of these structures will also be assessed.
An appraiser will look at heating, air conditioning, plumbing and wiring. Any fixtures, including carpets and lighting fixtures, will also be examined. Any home improvements the buyer may have made, such as the installation of energy-efficient appliances, will be taken into consideration.
The appraiser will also look at the value of similar properties in your neighborhood when determining a home’s value.
How An Appraisal Works for Buyers
Typically, the appraiser belongs to an appraisal management company and is an independent and licensed professional who follows a home valuation code of conduct to ensure an objective valuation.
If a home’s value is assessed as lower than the selling price, your lender may only offer a mortgage up to the value the appraiser has determined. If the appraisal does come up short of the asking price, the buyer may be able to negotiate with the seller or make up the shortfall with cash or a reduction in price.
How An Appraisal Works for Sellers
A seller wants to get a good price. A low appraisal can ruin the best-laid plans. Yet there are things a seller can do to avoid a low appraisal.
- Make repairs or improvements in advance: Include plumbing or heating repairs, paint jobs, window cleaning, and roof repairs.
- Consider a professional cleaning.
- Ensure curb appeal. Lawns and surrounding grounds and structures should be well maintained. Keep tree limbs away from the house as these can cause damage.
- Research sales of similar properties in the neighborhood to get a sense of current selling prices. The research should go back only a couple of months as market values can change rapidly. Take into consideration that any foreclosures in the area can have an effect on the asking price.
Note that if the seller finds the appraisal is low, a request can be made to have the home’s valuation done again.
When you consider what home appraisers look for, preparedness is key to avoid spoiling a home appraisal. Get a no-obligation quote on the cash value of your home today.