Whether you are awaiting closing or just trying to refinance – Appraisal forms might not always capture a home’s true value, but there are ways to avoid disappointment.
After speaking to a handful of appraisers, below are tips based on the conversations. Caution: Some of the advice-like home valuations themselves these days-might feel contradictory. But what they all agree on is to keep the look, feel and condition of the property as updated and cared for as possible.
1. Spruce the house up. But appraisers caution that you don’t need to deep clean under couches and that a few dirty dishes won’t hurt your value. Rats, cockroaches and that car you’ve been tinkering on might… “Things like overgrown landscaping, soiled carpeting, marks on walls – those do affect value. In other words, think broom clean, not set design for a home-decorating magazine.
2. Curb appeal also matters so mow the lawn, hack those weeds and trim those hedges. This can also help offset your house from unfair comparisons with foreclosures nearby. In today’s climate I can’t stress enough condition, condition, conditions. An hour of two, for the most part, will set your home apart in the actual picture that the lender gets from the appraiser vs. the actual picture that the appraiser will provide of the foreclosure down the street.
3. Keep a list of all the updates you’ve made and be ready to hand it over; a sketch plan of the house indicating square footage also helps. Have a list of updating done within the past 15 years. Itemize each update with the approximate date and approximate cost. Also highlight the notable features of the property. Remember the items that an appraiser might not notice, like a new roof or insulation. Don’t forget the minor items. If you have installed a new sink and had the tub sealed, that counts to the experts.
4. Have comps on hand. Yes, you say this is the appraiser’s job but every little bit helps, especially if they are aware of a property that sold without the aid of a Realtor (i.e. for sale-by-owner). That can mean it wasn’t posted on the Multiple Listing Service, and result in other delays by the time it gets posted through other government data sources.
5. Be mindful of peeling paint. Government-insured loans such as FHA and veterans’ loans will require peeling paint to be removed in houses built before 1978. But don’t worry too much about a child’s scawling on his bedroom wall, unless it’s going to require a whole new paint job.
6. Focus. Don’t spend money that won’t yield a return on the investment. The best expenditures for most markets are paint, carpet, light and plumbing fixtures. Prioritize what you do; if you’re the type of homeowner who has upgraded and fixed items as they broke, you should be fine.
7. Location still matters. If there have been changes to the neighborhood, mention them, from a new playground to a new Whole Foods. If the area’s just been declaared a historic or landmark district, let the appraiser know.
8. Keep the $500 rule in mind. Appraisers often value houses in $500 increments so if there’s a repair over $500 that can or should be made, it will count against the property. Fix leaky faucets, cracked windows, missing hand rails and structural damage.
9. Also remember the concept of “effective age,” the age the appraiser can assign to a home after taking into consideration updating and condition. Say you have a cracked window, thread-bare carpet, some tiles falling off the shower surround, vinyl torn in the laundry room, and the dog ate the corner of the fireplace hearth, these items could still add up to an overall average rating as the home is still habitable, however your effective age will be higher resulting in comparables being utilized which will have the same effective age and resulting lower value.
10. Lock up Fido and Fifi. Appraisers say they get annoyed enough by homeowners following them around but a snarling, growling dog is even worse. Along the same lines, try to make the appraiser comfortable – if it’s cold out, put the heat on: hot out, the air conditioning. If it’s 100 degrees out and you never put the air conditioning on, put it on for the appraiser so they don’t question that your unit is broken.
With those things in mind, let the appraiser do his or her job. Questions and banter may make the inspection go slow or make the appraiser miss something. Save questions until the inspection is over.