Selling Your Home? Make Sure It Appraises For Maximum Value

Beth Sterner
Beth Sterner
Published on October 31, 2017

Two crucial part of the home selling process that can throw homeowners for a loop are the home inspection and the appraisal. Both can substantial impact on the market value of the home and, thus, how much money the homeowner makes from the sale.

The home inspection will reveal things needing repair and these can be negotiated between the seller and buyer.

While both can potential break the sale of the home, the appraised value is not something that can be negotiated. Working with an experienced a real estate agent to determine the current market value of your home will save you a lot of headaches with the appraisal. Then, do everything you can to prepare your home to ensure that the appraiser agrees with that value.

What Influences Value To An Appraiser?

Real estate consumers don’t typically understand the role an appraiser’s has in the home sale process. For example, even though the buyer pays for the appraisal, it belongs to the bank (lender), not the buyer.

By law, however, a copy of the appraisal must be given to you if you request it in writing, according to the Federal Bureau of Consumer Financial Protection.

Residential appraisers take multiple things into consideration when determining a home’s value. Some of the biggest considerations are out of the sellers control and include local housing market trends, which are impacted by economic, social and other forces. Supply and demand is an example of this.

In other words, the current real estate market.

The appraiser will use all of these factors as a starting point when studying the neighborhood, your home’s characteristics and competitive properties to arrive at the home’s appraised value.

There’s Value In A Well-Maintained, Clean Home

If you’ve maintained your home over the years, your home inspection will likely be a breeze. A well-maintained home will also impress the appraiser. Making small repairs, sprucing up the home’s curb appeal and cleaning the home will help you with both the home inspection and appraisal.

While some appraisers say that clean properties don’t result in higher values, others, along with many real estate industry insiders, beg to differ.

The home’s condition, however, will have directly impact its appraised value – known as the Condition and Quality rating in the appraisal industry. The condition rating can range from the best being C1 (for new homes) to the worst C6 – for homes with severe deferred maintenance issues and defects that may impact the home’s habitability.

During this phase of the appraisal, the appraiser will take all the updates you have made to the property into consideration.

Supply The Appraiser With Accurate Data

Don’t assume that the appraiser will notice the upgrades you’ve made to the home. Provide a list of them including the dates they were performed and by whom.

Get specific in your explanations. Rather than “Bathroom remodel,” be more specific. “Bathroom remodel: new tub; travertine tile work; cherrywood cabinetry; Kohler sink, faucet, etc. …/Installed 2009/$15,000 cost,” says Ryan Lundquist, certified residential appraiser in Sacramento, California.

In fact, Lundquist offers a handy information sheet you can download, fill out and offer up to the appraiser when he or she visits the home.

Don’t assume the appraiser is familiar with your neighborhood

As a result of the Dodd-Frank reforms, appraisers are typically assigned jobs by an Appraisal Management Company, or AMC for short. And, these jobs are assigned “essentially at random,” Phil Huff, CEO of a real estate appraisal data company in California tells Market Watch’s Daniel Goldstein.

Which means, the appraiser may have little to no knowledge of your neighborhood.

Make a neighborhood description part of the data you supply to the home appraiser. Be short and direct with your description. Lundquist suggests a bulleted list to make it easier for the appraiser to read quickly.

Tell the appraiser what you appreciate about the neighborhood, about your HOA (including fees), anything important about its location within the city, anything in particular that makes your neighborhood among the “in-demand” areas of town and any information you have on pending projects that will have a positive impact on your area’s home values.

Do mention the school district if it is of high enough quality to positively impact home values in the neighborhood.

Other items to point out to the appraiser include:

  • If your lot is more desirable than others nearby, include a copy of the property survey.
  • Home features that the appraiser may not notice, such as energy efficiency.
  • Any information you may have on why a nearby home sold for less than it should have, such as a divorce or a sale to a member of the homeowner’s family.

Sure, there may not be anything you can do to change the economic forces that influence your home’s value in the eye of the appraiser, but taking care of the items that are within your control will help a great deal.

Fill out the form below to schedule a time we can discuss your home’s value and any steps you may need to take to prepare your home to sell.

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