Selling a home can be stressful. The added weight of a home appraisal and the impact it can have on the successful sale of your home can feel like a make or break moment in your home selling process. Here is a breakdown of what a home appraisal is and how you can prepare for it.
What is a Home Appraisal?
If a buyer is obtaining a mortgage, most of the time the lender will require an appraisal. (There are exceptions if the borrower is putting down a large amount and has great credit.) The lender wants to ensure the home is worth what the buyer is paying for. After all, the home is the security for the mortgage. The lender will hire an appraisal management company, which will in turn hire the appraiser. The lender doesn’t get to directly select the appraiser, nor does the buyer. There are rules in place designed to have an impartial evaluation.
What are Appraisers Looking For?
An appraiser’s job is to determine market value based on condition, location, and market activity. They measure the home, take pictures, then compare it to active, pending, and sold properties. Then they make adjustments up and down for differences to arrive at market value. Depending on the size of the home, you can expect the appraiser to spend about 30 minutes to an hour at your home. Ideally, your Realtor will be present during the home appraisal to provide information and field any questions.
If the buyer is obtaining an FHA or VA loan, the appraiser will also be evaluating whether there are any issues affecting safety, soundness, or stability. So if they see any obvious problems with peeling paint, broken windows, leaky roof or leaky plumbing, they may note those on the appraisal. Afterward, the lender may require that the issues be corrected prior to funding the loan.
Knowing what appraisers are looking for and preparing your home to appear as safe, sound, and stylish as possible can set you up for success with your appraisal process. Here are several ways to make sure you get the appraised value your property deserves.
Get The Safety Details Right
Before an appraiser looks at your property, make sure you have smoke detectors and carbon monoxide detectors in place and operable. The standard is one smoke detector in each bedroom and one in a hallway. You also want to have a carbon monoxide detector in a central location. Additionally, your water heater will need double straps meeting the current code. Safety is always a primary concern. So a lack of care for these details may raise the appraiser’s concerns over other home features.
Catalog Your Improvements
Make a list of all of the home improvements you’ve made on your property and provide these to your Realtor so he or she can share that with the appraiser. If you’ve installed new flooring, replaced the roof or windows, remodeled the kitchen, or recently painted, you’ll definitely want that on your list. Make a note of when each improvement was completed and what you spent. While the projects won’t add as much as you’ve spent on them, they will positively impact the appraised value. Remember to include things that appraisers can’t see, like plumbing upgrades or electrical rewiring.
Clear Out and Clean Up
You may have already given your home a thorough cleaning and de-cluttering prior to placing it on the market. However, if there are any areas of residual clutter, it’s not a bad idea to pay attention to them prior to the appraisal. Technically, the state of housekeeping doesn’t impact the value of a home during the appraisal. However, it’s easier for an appraiser to focus on your home’s details if there’s no “stuff” in the way.
Tell Your Appraiser About the Neighborhood
Ideally, your appraiser will be local and will be familiar with your neighborhood. But you can’t count on it. Make sure that on your list of improvements, you also include any area factors that may impact your home’s value. Is there an award-winning school down the street that draws would-be home buyers to your neighborhood? How about an up-and-coming business district with hip coffee shops, trendy eateries, and popular vintage areas? Or proximity to a Park and Ride Station for the Blue Line? These are things that can not only draw buyers but also impact value.
Have More Appraisal Questions?
If you have any questions about the appraisal process, your Realtor is a great resource. Don’t hesitate to ask them questions. If you’re still looking for the right agent to help guide you through the process of selling your home, The Shannon Jones Team would love to help. The team is well versed in buying and selling property in Long Beach and its surrounding areas. To reach out, please give us a call at 562.896.2456 or fill out the form below.
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