Guide to Increasing Your Home’s Appraisal Value
You’ve already done the hard work getting your house ready to put on the market. You may have even already found the perfect new home. But before the closing can take place, your home will likely need an appraisal because the buyer’s lender needs to verify the value of the property.
A market value appraisal is conducted by an independent third party. We are here to help you learn how to increase your home value for appraisal purposes.
What Is A Home Appraisal?
Understanding the appraisal process is your first step. If you are already familiar with it, you are ahead of the game and can feel free to skip this section!
An appraisal does not include any of your furniture or personal items. A home appraisal compares your property with other comparable recently sold properties in your area, using criteria like square footage, materials, amenities, and condition. These other homes are often referred to as “comps.” Comps are used to create a fair market value (FMV) for your home.
Appraisals can be used by real estate professionals and lenders in different ways. A refinance appraisal tells your bank how much your home is worth, to help determine how much equity you can access. A market value appraisal is often used to set your listing price. If you are already in contract, a lender’s appraisal helps the bank understand how much they should lend on the property. For any appraisal, you should always be sure to use a qualified appraiser.
When the appraiser arrives, you should be prepared for them to spend several hours at your home. You do not need to be present for this visit. The appraiser will measure the property size, assess the condition of the interior and exterior of the property, and note the condition of the “fixtures” – i.e., the items that will remain in the property after you sell.
Why Are Home Appraisals Important?
Home appraisals are important because buyers use them to determine how much your home is worth. If you haven’t yet listed your home, the appraisal will help you set a target sales price.
This is important because buyers often search within specified price ranges. If you are already in contract, your purchaser’s bank will require that your appraised FMV meets or exceeds the contract purchase price. Without this favorable assessment, the bank probably won’t lend your buyers the money, and you may have to relist your home. That’s never fun!
Obtaining the highest-value appraisal can be a collaborative effort. Work with your Realtor to be sure your home will appraise at the desired value. Your Realtor can help you be sure your home is appraisal-ready. A good Realtor is a fresh set of eyes, helping you see your house as an appraiser will, in addition to a guide to help you understand the process.
If your house is already in contract, consider this scenario: after a hot bidding war, your buyer finally signs the contract for a purchase price over asking, but your contract includes an appraisal contingency. This means that your house must appraise for the amount indicated in the contract. A low appraisal could threaten to unravel your whole deal!
How To Increase Your Home Appraisal Value
Although the appraisal process is intended to be objective, it never hurts to help the process go well by making sure your home makes the best possible first impression.
Your Realtor should be present to talk the appraiser through the property and provide comps that support the sales price. The appraisal is one part of the home buying or refinancing process you can easily influence. A little bit of extra work can go a long way to increasing your home’s value.
The appraisal process is not the time to undertake major renovations. Follow these simple tips, which can be completed without spending a lot of time or money, to increase your home’s appraisal valuation.
1. Curb Appeal
Make your home exterior the most inviting on the block. Have the weeds pulled and fresh mulch laid, plant some interesting new flowers, maybe even paint the front door a fresh color.
2. Make the Inside Sparkle
On the inside, touch up the paint from everyday scratches and dings (or repaint outdated room colors), run your Roomba, and consider replacing dirty bathroom grout or caulk. Although you may love your dog Fido, if you have pets, consider removing them from the home and using an air freshener prior to the appraiser’s visit. Although an appraiser is accustomed to being in homes that looked lived-in, a clean home generally is more inviting.
3. Remove Clutter
Watch out Marie Kondo, it is time to remove all those items that don’t bring you joy (and more). Be sure to go room by room and remove any clutter before the appraisal. Even if, in the short term, you don’t feel your home is as cozy as usual, it is more visually appealing when clutter-free.
4. Make Sure Everything Works
Check faucets and drains for leaks or clogs. Turn on the appliances and make sure they work properly. Keep the house at a comfortable temperature for the appraiser’s arrival. You want to make the appraiser’s job as easy and pleasant as possible.
5. Be Prepared
Give your Realtor documents, so they can be ready to hand them to the appraiser if needed. Be sure you have a copy of the complete offer, municipal tax valuation, property listing history and sale data. You should also have a copy of the floor plans, survey, deed, list of property features and updates (including costs and when the updates were finished). Lastly, the Realtor can help you create your own list of comps (both good and bad) to provide the appraiser and help you explain why those are relevant, or not. The more you know about your home and its value, the more you can share when conversing.
Conclusion
Once appraisals are complete, it is difficult to change the outcome. That is why it is always better to be prepared, and to have an experienced Realtor on your side.
Mike Plotkowski has been an industry insider for years. His personalized service, professionalism, and renovation knowledge will help you get the appraisal value you deserve. Contact him today to help you sell your home and find your new luxury “forever home”.
