When selling your home, an appraisal is an inevitable part of the process. Even if your buyer doesn’t ask for an appraisal, the lender will still require that an objective third party professional determine the value of the home. Although the appraiser’s opinion will be based purely on the market and the state of your property, it is still worthwhile to know the things an appraiser wishes you knew.
Appraisers don’t have superpowers
Many people believe an appraiser can tell you what your home is worth right after they are finished at your home. The reality is an appraiser has to consider many factors first. The appraiser will look into comparable listings (called “comps”) from the surrounding area. These are homes similar in style, location, and footage sold within the past few years. Then the condition and quality of your home along with any other factors that would affect the cost of the home are used to make an accurate assessment. Expect it to take a few days for the appraisal to be completed.
Make sure to prepare your home
While your home is appraised based on the square footage, number of rooms and amount of land, you still want to show your home in its best light. If you take the time to fix any obvious repairs and clean up the home, the appraiser can easily access all areas of your home and see that it is in good condition.
Make a list
In order to get the most accurate appraisal, it’s important that the appraiser have the most complete and up to date information on your home. Make sure to provide a current list of the significant home improvements you have made. Does your home have new paint? Did you build a deck or patio or install new faucets or fixtures? All of these things are items the appraiser needs to determine your home value.
Have a good real estate agent
Before listing, make sure you have a realtor that takes the time to price your home correctly and doesn't exaggerate or falsify details. If your home goes on the market and is not priced correctly, two things can happen. First, if your home is priced too low and the appraisal comes back much higher, you leave money on the table. The opposite problem is pricing it too high. An overpriced home can lead to big issues when the appraisal comes in under the listing price. This could cause lending issues for the buyer and it could cost you the sale. When it comes to falsifying details, know that the buyer might not be the one that sees the false statements, but the appraiser will be the one to notice.
Understand cost doesn’t equal value
Many homeowners are excited to make improvements to their home, but they don’t take the time to determine if the renovations they are doing will be a good investment. The costs of improvements do not always translate to an equal increase in the market value of your home. For example, putting in $15,000 in upgrades doesn’t mean you will get that back when it is time to sell. Know that you can take any proposed improvement plans to an appraiser to conduct a subject to appraisal. This could help to determine how the improvements would compare to other homes and what they have recently sold for.
If you are getting ready to sell your home, understanding these key things will help you to be proactive in the appraisal process. Better yet, contact a COListings agent who will not only guide you through the appraisal, but the entire sale to ensure it proceeds smoothly.