Are you ready to list or refinance your home while rates are super low and the housing market is booming? That’s great news! However, before you get too excited, you’ll first have to find out how your property measures up on the eyes of the bank appraiser. And, since no one wants to have to sink a lot of money into their property to get it sold or reassessed, we have some simple home appraisal tips that will be sure to get you top dollar for your home!
Let’s get started!
1) Walk Through the Home Like You Were Going to Buy It
Ok, so this first one can be tough. Since you are likely going to have a bit of bias towards your own home, you will need to remove your emotional blinders for a moment.
Set aside a few hours to walk through your home with a checklist and really focus on all the little things you’ve been letting go for the past few years.
Are you seeing any of the following?
- Peeling paint,
- leaky faucets,
- banged up trim,
- doors that stick, squeak or don’t stay shut,
- dirty windows, etc.
Take a full assessment of your home and make a plan to tackle all the the little tasks you’ve been putting off. Make sure you put a good scrubbing on everything as well so it looks fresh and smells clean for the appraiser. It’s amazing how those extra little touches can improve the look and feel of a property.
Already completed some significant updates?
Make sure you provide the appraiser some before-and-after photos of any project you’ve tackled.
Let’s say you..
- updated the kitchen,
- renovated a bathroom,
- updated your HVAC system, or
- made some structural updates
Add a breakdown of costs and show receipts to showcase the added value. This home appraisal tip will almost certainly help your home stand out among others in your surrounding neighborhood. And ideally, help you recoup some of that investment cost.
Related: 6 Ways to Sell Your Home Fast
2) Maximize Curb Appeal Before the Appraisal
They say first impressions are lasting impressions. It’s no different when it comes to properties.
If the appraiser rolls up to a home with…
- two-foot high grass,
- Jurassic Park plant life,
- dilapidated fencing.
- chipped concrete stairs,
- peeling paint or shingles,
- etc., etc. etc…
…it’s probably not going to shake out so well for you as the seller. A little elbow grease and minimal upgrades can increase the home value considerably.
3) Research the Competition
A lesser known home appraisal tip is to research the home comps in the area. Yes, the appraiser will do this as part of the process, but it helps in two ways.
- You will save them precious research time. They will only have to verify the information you provide, or can compare it to the comps they found for a more holistic valuation.
- After doing some digging, you will have a better idea of whether your asking price is reasonable and adjust your expectations accordingly. Also, if the appraisal comes in lower than you were expecting, you will have some data to back up your concerns on the result.
This information isn’t too difficult to access. You can punch in your address and see what the estimated value of your home is on Zillow, Realtor, and a few other listing sites. It’s best to take an average from the various sites as some tend to skew higher or lower.
One of the best ones, in my opinion, is the one Chase provides. It goes the extra step to show local comps and gives you a better idea of what the estimated appraised number is based on.
Another simple home appraisal tip is to stage the home.
Nothing says “home, sweet home” like a house that looks cozy, well-designed and barely lived in. While you certainly don’t have to pay a staging company to do the work, you should plan to put away as many personal items and photos as possible.
The cleaner and more organized home a looks to the appraiser, the easier it is to maneuver through the home and capture solid images for the report. All the better if it looks like he or she is stepping in to take photos for a Better Homes and Garden magazine shoot.
5) Don’t Do Home Projects Without the Proper Permits
This may seem like an odd thing to add to home appraisal tips, but it happens often enough that it’s worth mentioning. Some homeowners decide to tackle a small home project without bothering to see if a permit is required. Then, when an appraiser comes through with the expectation of finding, say a 1.5 bath home, but sees 2.5 baths, the seller is going to be the one who takes the hit.
Before an appraisal can be completed, now the appraiser must go and seek out the required permits for the project.
If he can’t find one, you now have a couple of options:
- You can sell the home “as is” and disclose to a potential buyer that unpermitted work was done. This could affect their insurance rates.
- You can attempt to apply for the permit retroactively. It’s recommended that you get a local contractor to make sure things look up to code before going that route.
You’ll have a better chance of having your property retain it’s market value if you get everything set up via the legal route. Even if the unpermitted work existed before you bought the house, if discovered/disclosed before escrow, buyers are considered liable for any required repairs.
6) Get a Second Opinion
Now that you’ve applied all these home appraisal tips and made sure everything is top notch for the next owner, it’s just a matter of waiting for the official report to come back. Once an appraisal is ordered, it can take anywhere from two to 10 days to receive the official feedback.
While many appraisers will often come in right around or above asking price, it can happen that a home gets valued lower than seems fair. Some issues that can affect the number are:
- inflated housing prices,
- a high amount foreclosures in the surrounding neighborhood, and
- current market values.
It’s not typical that a seller will get a copy of the report, but you are allowed to request a copy. Since you will have already done your own comp research at this point, you will be able to compare notes and see why this happened.
Sometimes you’ll need a second opinion…
If the numbers still aren’t adding up, it may be worth your time and money to get a second opinion. You will have to file a dispute with the buyers’ lending company and can request that another appraisal be done.
Although you can ask that the buyers pay for another assessment, it’s more than likely you will end up covering the cost of a second appraisal. It will cost you anywhere from $300-$500, but it could save you thousands in the long run.
In fact, you may want to consider paying for a home appraisal before you even list your home to see what kind of ballpark you are working in. This will give you a basis for whether or not you will want to dispute one later.
At the end of the day, even with all these home appraisal tips, you are the seller and will need to decide if you can or want to accept the lower valuation of the purchase price.
- You have the option of refusing to move forward with the sale, and relisting the home.
- You can also request that any future transactions be cash-only so as to avoid any issues with the potential lenders not approving the sale price.
However, it’s likely that ANY potential buyer will not want to risk overpaying for a home. They will probably still order their own appraisal. This means you may still have a tough time selling the property at your asking price.
Usually, the best bet is to see if the buyer is willing to split the difference between the selling price and the appraised value.
If you are selling a home for $200k and the appraisal comes in at $190k, the lender will not allow a mortgage for more than the quoted value. However, you could negotiate with the buyer and say you will only go as low as $195k and request they pay the difference in cash.
You may also want to make a case for why you believe it’s worth the extra five grand. Again, this is where your own research comes in handy and you can make a case for why you believe the property should be valued at your asking price.
Are You Ready For Your Home Appraisal?
These home appraisal tips should help you get the ball rolling and prepare you for next steps before you get your property listed.
Is there anything else would you add to this list? Have you ever run into a low home appraisal issue as a seller? How did you deal with it?
Are you ready to put these home appraisal tips to work? It’s still a pretty hot market out there!
AUTHOR Kerah Kemmerer
Hello! I'm Kerah. I'm a writer and personal finance enthusiast with a background in marketing. I'm also a wedding and portrait photographer, part-time RVer and a lover of simple and minimal living. Always up to some project or adventure over @krisandkerah on Instagram.