We have great news! Great things are happening in the real estate market. More houses are selling and the average sales price is going up, but with the great news comes some great challenges. Specifically, how to get your home to appraise.
Low appraisals are becoming a problem for many buyers, sellers and refinancers, as the values of homes have started to stabilize and climb in many markets. Most appraisers are trying to get you the value - it's not their goal to ruin the deal - but they do have to have supporting documentation and comparables to support the price. With prices going up, the past sales are most likely lower than what your house is selling for, so getting the appraisal to come back at or above value can be very challenging.
We spoke with several certified and experienced appraisers in the area and here are some tips that they gave on what you can do to help your home appraise.
1. Make Sure the Appraiser Knows Your Area
The appraiser should be from within a 10-mile radius of your property and should be very familiar with the surrounding area. You can request that the lender send a local appraiser, but if they do not, make sure that you provide as much information as possible about the quality of your neighborhood.
2. Provide Comparables
Not only will you save the appraiser some work, but you will insure that they are getting price information from homes that are very similar to yours by providing them with at least three solid and well-priced comparables. Information on recent sales prices and details such as the number of bedrooms and bathrooms can be found on Realtor.com, Zillow and Trulia.
3. Know What Adds the Most Value
Start with the kitchen and bathrooms, if you are only doing minor renovations. Items like hardwood floors, a new roof, new HVAC, an enclosed garage, landscaping and adding square footage will help to increase the value of your property.
4. Document Your Repairs and Renovations
Keep well-detailed documentation and receipts for all of your fix-ups. Take before-and-after photos and keep a spreadsheet of the amount that was spent on each improvement. Make sure you point out structural improvements to items like electrical systems and heating and cooling systems, which add value, but are harder for an appraiser to see.
5. Talk Up Your Community
Make sure the appraiser knows about any exciting new developments or attractions in your town, such as restaurants, parks or museums.
6. Distinguish Between Upstairs and Downstairs
A finished basement may be important to buyers, but unfortunately, terraces and basements are not valued as highly as above-ground square footage. You will see a bigger return on your investment on renovations done above-ground.
Everyone likes a clean home. Tidying up, touching up paint, mowing the lawn and opening the blinds before the appraisal will go a long ways in improving the look and feel of your property.
8. Give the Appraiser Some Space
Try not to shadow the appraiser throughout the house. Give the appraiser space to adequately evaluate the home.