Recently the mortgage industry came under fire for inflating home appraisal values (in some cases) and undervaluing them in others. Banks have also been criticized for overcharging for bad appraisals by hundreds of dollars, even though the appraisal companies they used were cheap and fast.
The stakes are high: Getting the correct appraised value of your home directly impacts how much you can borrow and what price you can ask for your home when you go to sell it.
How can you make certain you get a fair appraisal of your property when the time finally does come to sell or refinance? Accurate home appraisals are available, but in the end it all comes down to the homeowner to make sure an appraisal is done right.
The following home appraisal tips can help you to make sure your own property gets a fair appraisal that is both accurate and useful:
Realize that Rules Don’t Guarantee a Fair and Accurate Appraisal
Lenders and appraisal management companies are both required to follow strict rules about how to conduct an appraisal, but that doesn’t mean you will automatically get a good one. With so much property being repossessed, refinanced, and sold right now, appraisers are under immense pressure to crank out reports quickly. Appraisers can and do miss things and make mistakes. It’s up to the homeowner to thoroughly review an appraisal for errors and/or information that might have been overlooked.
Do Your Detective Work
Your home appraisal is based largely on what comparable homes in your specific neighborhood have sold for in recent months. Your house may have lots of great features, but if homes all around you are being sold below their fair market value because of economic distress, that is going to negatively affect the appraised value of your home as well. Before the appraiser comes, ask a real estate agent to print out the sales prices on a list of comparable homes in your area. Most appraisers appreciate having the additional information, and if any unusual negative exist, make sure that is noted too.
Watch Your Curb Appeal
Technically speaking, appraisers aren’t supposed to be swayed by how clean or cute your home is, or by whether or not you have flowers planted by the front door, but it’s human nature to notice such details. A home that has lots of broken doorknobs, scuffed floors, and old paint is going to present differently than a home that is spic and span and in perfect shape. Mow the lawn, tidy up the closets, make any necessary small repairs, wash the windows, and pick up any clutter inside and out before your appraiser arrives.
Make Sure All Remodeling Projects are Complete
If you’ve been finishing a bathroom remodel, don’t have the appraiser out until you’ve completed the project. Appraisers have to rate your home on exactly what is there at the time of the appraisal, not on what you intend to have finished before you sell or refinance. If you’ve been meaning to start any minor remodeling projects to increase the value of your home, you might want to get them done before your house is appraised, not afterward.
Point Out Your Home’s Best Features
You will not be allowed to be present during the actual appraisal, but you are allowed to type up a list of your home’s best features and hand it to the appraiser. Note any recent improvements like window upgrades and remodeling projects, benefits of living in your specific neighborhood such as proximity to schools or public parks, and anything unique about the property itself such as professional landscaping or spectacular views.
Be sure to include any new features to your home such as brand new carpet, newly installed fixtures, granite counter tops, or perhaps even sleek new shower panels. Doing this will enhance your home’s chances of being recognized in a crowded market.
Fight Back if the Appraisal is Inaccurate
Review the appraisal thoroughly to make sure all the basic facts are correct: square footage, features of the home, number of rooms, etc. If you find mistakes, call the appraiser and ask to have them corrected. If the appraiser refuses to make the corrections, file a complaint with your state’s real estate appraisal board.
Although sometimes a seller is pleasantly surprised, the fact is that most people think their homes are worth more than they actually are. Appraisers have to go by the actual features of your home and the average cost per square foot of comparable homes sold recently in your neighborhood. Overvaluing your home doesn’t do you any good in the long run, because simply saying your home is worth what you want it to be worth won’t get it sold. If it’s a refinance you are after, over-borrowing against imaginary value can get you into more trouble over the long run than simply facing facts earlier on. So try to temper your enthusiasm and personal attachment with a bit of objectivity regarding your property and its value.
Remember That Values Change
If after seriously heeding all the tips and tricks for getting a fair and accurate appraisal you are still disappointed with the results, you might just want to reconsider your plans, whatever they were. Just because your home value isn’t where you want it to be today doesn’t mean it can’t be there in a year or two or five. Can you make improvements to boost that number? Is your home likely to appreciate or fall further down the scale no matter what you do? Having accurate information now helps you to decide what to do next.