The appraisal is one of the most important (and most overlooked) parts of the home sale process. Mortgage lenders require a home appraisal to ensure they aren’t loaning more than can be recouped by selling the home. That means, when you’re selling a home, you want the property to appraise for as much as possible – or risk your deal falling apart.
But what exactly are appraisers looking for? And is it even possible to prepare for a real estate appraisal? Here’s a look at the six general things appraisers will take into account, as well as some quick tips for preparing for your real estate appraisal.
1. Property Size
Appraisers first focus on the overall size of your property. In general, the larger your lot and the more square footage your home covers, the higher your appraisal value will be. Also, keep in mind that more bedrooms and more bathrooms will also boost your home’s appraised value.
This makes perfect sense: People prefer having more space rather than having less, so larger lots and larger homes are naturally going to appraise for more.
2. Key Exterior Components
The structural integrity of a home is also an important consideration when appraisers calculate a value. There are three basic components that comprise a home, and each gets close attention from an appraiser:
- Foundation
- Walls
- Roof
If there are issues with any of these three basic components, the appraised value of your home will drop dramatically. Why? Because repairing foundations, walls and roofs are some of the most expensive repairs a homeowner can make – and those costs will be passed along to the buyer.
3. Interior Condition
Without proper maintenance, repairs and updates over time, a home’s interior can start to look drab and dated. An appraiser will look closely at key components like doors, windows, flooring, plumbing and the electrical system. If these important components are showing signs of wear and tear, the appraised value of the home will likely drop.
Outside of the big, important interior components, appraisers will also look closely at light fixtures, built-in appliances and similar aspects of your home. Again, the newer your fixtures and appliances and the better condition they are in, the higher your home’s appraised value will be.
4. Updates and Improvements
There’s a reason why updated and renovated homes often sell for higher prices – buyers want homes that have been well taken care of and that reflect current design and style preferences.
If your home was built in 1980 and it still features the original carpet, wallpaper and appliances, your home’s value is going to drop – no matter how great the condition of the home’s interior. But, that said, a home built in 1980 that has been steadily updated and improved through the years is going to appraise for a much higher value.
5. Anything Added
Appraisers also look for “extras” large and small that have been added to your home and that can serve as differentiators. For example, big extras might include a sunroom, a swimming pool or even a nice deck or patio. Small extras might include insulated windows, a security system or a gas fireplace.
Of course, the condition of a sunroom, deck or swimming pool matters, too. There’s no point in having a swimming pool if it’s in poor condition and in need of significant repairs. In fact, having a dated pool or a pool that needs repair can actually harm the value of your home.
6. Comparable Properties
When you get your home appraised, you’ll learn all about “comparable” properties. Appraisers look at homes comparable to yours that have sold in the past six months. They are looking for comparable conditions, comparable lot sizes, comparable square footage and comparable bedroom-bathroom breakdowns.
In some cases, neighborhoods have several homes with the same floor plan. If you’re really lucky, a home with your exact same floor plan will have sold for an attractive price within the last six months. The price per square foot of sold properties comparable to yours will play a significant role in calculating your home’s appraised value.
Quick Tips for Preparing for an Appraisal
Is there anything you can do to boost the appraised value of your home? Yes. Keep in mind that appraisers are only human, and they can be influenced by the look and feel of your home. Here are four things you can focus on as the day of the appraisal draws closer:
•Exterior: Make sure your yard is mowed and trimmed. Try to get rid of as much clutter as possible. Also, if you have a pool or deck, make sure they have been skimmed/swept to make the best first impression possible.
•Interior: Clean your home as thoroughly as you would when a prospective buyer stops by. Get rid of clutter inside to make your space feel larger and consider hiding anything that looks dated – even an old cathode ray tube television can make a room feel older and less updated. Remember, appraisers are only human.
•Minor Repairs: You’ll get dinged for any minor repairs that are needed, and appraisers typically ding you in increments of $500. So, if you’ve put off painting a scuffed wall, paint it before the appraisal – or risk losing $500 off your home’s value. Scour your home looking for easy-to-make repairs, and you’ll give your appraised value a little boost.
•Convenience: This is a small thing, but make sure it’s easy for the appraiser to do his or her job. Lock up your dog for the duration of the appraisal. Keep the house cool in summertime and warm in winter. Offer your appraiser a drink of water and invite him or her to use the restroom if needed.
Have Questions About Home Appraisals?
A huge part of my job is walking alongside clients from offer acceptance to the closing of a home sale. Each step along the way is vital – the appraisal included. And I use my experience and knowledge to ensure that nothing gets in the way of the successful closing of the deal.
Do you have questions about an appraisal or another step in the home sale process? I’m always here to answer your questions. Simply email me at pthessen1@gmail.com.
