If you decide to take advantage of current low interest rates to refinance your mortgage, there will come a moment when you will usher an appraiser into your home. To prepare, there’s no need to do everything you do when you’re selling your home, but this is also not the time to quickly dust and wait for the doorbell to ring.
What’s the number one thing you should do to get ready for the appraiser’s visit? Take the visit seriously.
Regardless of what you or others believe your home is worth, the dollar value the appraiser puts on your home is what your mortgage bank uses for its approval process. That dollar value can be difficult to change once submitted. Rather than take a wait and see attitude, it’s better to help impact the appraisal outcome from the start by doing some or all of the following:
Manage first impressions.
It’s a rare appraiser who will spend hours at your home. Your home needs to make a good impression quickly.
The appraiser visits your home to verify that information he or she has been provided is correct (including square footage), identify other things that might impact the valuation and gain a first-hand look at the overall condition of your home, both on its own and how it looks compared to the rest of the neighborhood.
To get ready, walk through your home with a fresh eye for things that can detract from a solid first impression. Clear clutter, fix obvious broken fixtures, and clean. Pull weeds, mow the lawn, and sweep the porch. Maybe call for a big trash pick up. Bottom line: You want the overall impression to be that you keep your property in really good condition, inside and out.
Before the appraiser arrives, turn on lights and open blinds, just like a Realtor does for a Sunday open house. Note: The appraiser will likely have a camera and the pictures taken are part of the official appraisal report. Consider clearing counters in the kitchen and bathrooms.
Make it easy to factor in home improvement values.
From the new granite in the kitchen and built-ins in the family room to the tank-less water heater and the new sprinkler system, over the years you’ve likely made improvements that can add value.
Don’t assume you’ll be able to walk the appraiser around and show off all the upgrades. One appraiser might be willing, but another could consider this too pushy and be annoyed. There is also a chance that some of the information delivered in person might not resonate until the appraiser looks closer for comparable home sales. By then, details might be forgotten.
A better idea is to prepare a written list detailing these upgrades, including cost, which the reviewer can use as he or she tours your property and also consult later.
Rethink Offering Valuation Advice
The biggest impact on your home’s appraisal value comes from the choices the appraiser will make regarding which recent home sales in your neighborhood he or she will use as a basis for measuring the value of your home.
Some homeowners make it a practice to attend local open houses. Over time, these open house visits can build to a better understanding of how their home compares with others in the neighborhood, not just on price, but with regard to upgrades, floor plans, storage space, views and more. If this is you, though, stop short of giving advice to the appraiser regarding appropriate neighborhood home sale comparisons. This is a dangerous practice.
“There are many things that go into identifying a true ‘comp,'” says Realtor Dana Green, Lafayette’s top producing Realtor. “You can actually hurt your appraisal by suggesting wrong ones.”
For best results, it’s better to contact your trusted Real Estate Advisor for advice first.
“We do this kind of work all the time for our clients and, even with that level of experience and the large number of transactions we work on every year, it can take us hours to do that valuation work correctly for just one property,” says Green.