Your Guide to Home Appraisals
May 28, 2021
The home appraisal process can be an anxiety-inducing experience because it greatly affects your options as either the buyer, seller, or homeowner of a home. But there are easily actionable ways you can help your appraisal go well. Read on to learn some of the best tips to follow to ensure you sing the praises of your home appraisal.
What Is an Appraisal?
In an appraisal, a state-licensed or certified appraiser closely inspects the interior and exterior of the home, making notes and taking pictures to describe its overall condition. They then research similar homes in the neighborhood to help calculate the home’s value and delivers their final report to you that includes the following.
- The size and condition of the home
- Notes about structural issues
- Notes regarding renovations and the surrounding area
- Photographs, maps, or sketches
Low Value vs. High Value
Real estate appraisals affect loan options for buyers and sellers and refinancing options for current homeowners. If the property is valued lower than expected, it can limit the loan you can take out when you buy or affect the terms of your current loan when you attempt to refinance as an owner.
As a buyer, your lender will not give you a loan for more than the home is deemed worth, so there will be a shortfall amount that has to be covered somehow. If you are unable or unwilling to pay the difference between the sale price and the appraised value, you can lean on the appraisal contingency in the purchase agreement to get out of the contract.
If the home is valued higher than expected, you as the homeowner have immediate equity and the ability to sell the house for more money or obtain more refinancing terms.
Easy to Follow Tips for Homeowners
If you are seeking an appraisal for a refinance, there are some simple steps you can take to help your appraisal be successful. The first and easiest tip to follow when planning your own home’s appraisal is to clean it up and put away any clutter that can negatively influence the appraiser’s opinion of your home. If you have pets, make sure they are not in the way of the appraiser. Recognizing that your appraiser is only human, make sure your home looks welcoming and smells clean.
If It’s Broke, Fix It
Objectively look around your home, inside and out, and take notice of anything that could make an appraiser think you have not kept up with its maintenance as you should. If you have access to the home’s previous appraisals, you can also check them to see what issues lowered its value before and ensure those have been addressed. This is the ideal time to engage maintenance servicers or make whatever small repairs you can so that everything is in good working order. Simple fixes like touching up paint and replacing broken doorknobs can only help to increase your home’s value.
Consider Curb Appeal
How people view your home from the street can affect how high your appraisal comes in, according to the Appraisal Institute. In addition to keeping the lawn manicured and plants and hedges trimmed, you should remove dead limbs or trees, apply fresh mulch to flower beds and clean off any exterior lights and windowpanes.
Keep a Paper Trail
It is always a wise choice to keep any important documents such as land surveys, photos, building permits, and receipts pertaining to improvements you have made to your home. You can show these to your appraiser to validate what you say you have done to update or upgrade the house. The more specific, the better in this instance — include as much detail as possible about any improvements you have made, including date and cost.
Check the Comps
Educating yourself on how much similar homes to yours sold for in the recent past will help you know if you are getting a lowball appraisal amount. In addition to thinking of your home as it relates to your neighbors, you can also let your appraiser know of any new amenities such as shopping malls, parks, or schools, that have cropped up in your area that can pad your home’s value even further.
We Keep You Appraised on Appraisals
Whether you are looking to buy a home or refinance your current one, The Mortgage Firm Gainesville is your partner throughout the whole process. Our transparent communication and expertise help you navigate the world of real estate appraisals with ease. Contact us today to find out more about how we can help you get into the home of your dreams — or get the most out of the one you are in now.