Are you refinancing your home? If you are, the lender will require an appraisal. Also, did you know an appraised value difference of even a couple thousand dollars can make or break your loan approval? So what steps can you take to ensure your home is appraised for maximum value without getting denied for a loan? Here are a few tips to help know what to expect from a home appraisal and make sure your home comes out on top.
What is an Appraisal?
Opendoor.com defines a home appraisal as “the process by which a licensed appraiser conducts a thorough inspection of a property to assess its true worth (which isn’t always the same as the listing price). The appraiser will then compile all of their findings into a report and generate the home’s appraised value.”
Make Sure Your Home is Appraised for Maximum Value
Most appraisers perform inspections by:
- Comparing sales of houses in your neighborhood
- Determining a sales price per square foot
- Applying that sales price per square foot to the square footage of your home
The appraisal should equal or exceed the amount you request for your loan in order for the lender to approve it. When home values in your area fall, refinancing becomes more difficult, especially when you have only a small amount of equity in your home.
And since an experienced appraiser has inspected thousands of homes, it’s quite easy for them to assess your home’s amenities quickly. An interior inspection can take about 30 minutes or less. And that’s not a lot of time in a home nor is it much time to make a good first impression.
The appraiser typically drives giving the outside of the house a cursory inspection. They don’t ask to see the inside unless something looks questionable. So it’s a good idea to request a walk-through appraisal from the lender. A walk-through inspection gives you the opportunity to point out the upgrades or improvements made to your home that comparable homes in your neighborhood don’t have.
When an appraiser determines the worth of your home, they take a lot into account. Some of the factors they must take into account can’t be helped, like your home’s location, for example. But there are things you as a homeowner can do to make certain your home is appraised for maximum value. So it’s recommended that you prepare in advance of the appraiser’s visit.
1. Prepare a Packet
Prepare a packet of information to hand the appraiser as they hurry out your door after they inspect your home. Include the basics about your home and anything that helps back up your refinance offer.
Some upgrades that can improve a home’s value include upgraded countertops and flooring, extensive trim carpentry or built-ins, and energy-efficienct upgrades to appliances, windows and insulation.
Fact sheet about your home:
- Address
- Year your home was built
- Square footage
- Number of bedrooms and bathrooms
- Size of the lot
List of recent sales:
The appraiser has access to recent home sales. But there’s always a chance they may miss something. Make a list of:
- Any for-sale-by-owner homes
- Homes sold to a relative
- Owners who sold quickly to move out of town
List of improvements and upgrades you’ve made to your home:
- List improvements and their dates
- Include contact information each contractor who worked on each improvement
2. Fix What’s Broken
The appraiser assigns an “effective age” based on your home’s condition and how well you’ve maintained it. For example, fix the following (and then some):
- Cracked windows
- Thread-bare carpet
- Missing tiles in the shower
- Torn vinyl flooring
- Damaged doors
- Cracked or mildewed caulk
- Hairline cracks in drywall
- Peeling or flaky paint, inside and outside your home
- Evidence of water damage that has been repaired
You want the effective age assigned to your home to be low. A higher effective age results in lower value. So, make repairs to anything that ages your home in the eyes of the appraiser!
3. Clean Whatever Needs Cleaning
Most appraisers say a clean or dirty home bears nothing on its value. But if a clean home adds to the appearance of a well-maintained home, affects the appraiser’s overall opinion of your home, and makes a better impression, what harm can a good cleaning do? Play it safe and clean up the following really well:
- Overgrown landscaping
- Carpet stains
- Marks on walls
- Clutter, inside and outside
- Loose and rotten boards on your fence
Will Your Home Be Appraised for Maximum Value?
Getting your home appraised for maximum value without getting denied for a loan to refinance is possible with some preparatory work. Some things impact your home’s value more than others do. But remember, the inspection process varies by appraiser. And everything you can do to ensure your home is appraised for maximum value and streamline the appraisal process is worth the effort when refinancing your home.
Contact me, Charles D’Alessandro, your Brooklyn Real Estate Agent with Fillmore Real Estate. As a Brooklyn real estate agent and broker with over 30 years of experience, I can help you prepare your home to sell even during these challenging times.
Our office is completely shut down and committed to your safety during the COVID-19 health crisis in compliance with the State of New York public health policies. I can be reached by phone at (718) 253-9600 ext. 1901 or by email at charlesthebrooklynrealtor@gmail.com.
Charles D’Alessandro
Your Brooklyn Real Estate Agent
718-253-9600 ext. 1901
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SOURCE: Brooklyn Real Estate Blog – Read entire story here.