Although your home has passed the inspection and the buyer has been pre-approved for a mortgage, the property still needs to be appraised for the deal to close. Appraisers are highly important when it comes to the home buying and selling process. Whenever a mortgage is originated—for a buyer to help finance a home purchase or a homeowner who’s refinancing—the value of the house must be confirmed with an appraisal. Appraisers come up with that value through inspecting the home, determining the number of rooms, and evaluating the residence’s condition and other features. They then compare that value with similar homes that sold in the neighborhood. A sale often depends on obtaining a satisfactory appraisal that supports the contract price, so sellers should do the following to help them along with the appraisal process.
The house should always show well. That means eliminating clutter to help rooms appear larger. Although some say the appraiser will see past the clutter, it’s not wise to risk an unfavorable view or opinion.
Offer a list of significant improvements
Certain enhancements—such as a new roof, air conditioner, appliances or electrical panel—may add value to the house. An appraiser often will gather data before visiting the home, so unless you point out significant and valuable updates and quality features, a pre-determined valuation could deter your sale.
Tout your neighborhood
Do certain features of your neighborhood add value and make your home more desirable to buyers? Be sure to make the appraiser aware of special perks, such as walkability to schools and shopping, top-rated schools, and nearby parks or recreational facilities.
Provide details on comparable homes in the neighborhood
Tell your appraiser about nearby homes that have sold recently, as well as any known factors that might have affected those sales negatively. This could include disrepair, an outdated interior, a foundation settlement issue, or problems such as mold or moisture due to a leaky roof. If a comparable home sold for less money, the appraiser will be fully informed and may make value adjustments due to those issues.
Tell the story of the sale
If your home sold for the full listing price because of recent upgrades, the appraiser won’t know those details unless you tell them. Maybe it’s on a larger lot, has an outdoor kitchen, various high-end landscaping improvements or has the best curb-appeal in the area.
Let the appraiser do their job
If you have a broker or a seller in your personal space during the entire inspection, the appraiser could miss a lot of the positives of the house. Although appraisals are based on data, they also involve a lot of subjectivity on the part of the appraiser. It’s in your best interest to make their job as easy and pleasant as possible.
And as always, don’t hesitate to call your personal PERL loan officer if you have any questions at all!