If you are selling your home or are refinancing, a home appraisal will be part of the equation. Many consumers don’t really understand just how important the report generated by the licensed appraiser really is, until it causes a problem.
One way to know what your home is actually worth is to contact a local and experienced real estate professional. You could request a C.M.A., or, Comparative Market Analysis, which is a fact-based document that includes key factors which determine the market value of your home. These include the square footage, number of bedrooms, number of bathrooms, the age of your home, property taxes, and any amenities as well as improvements. This will give you a much more accurate idea of your home’s worth.
Why Lenders Require Home Appraisals
Though a CMA is based on facts, lenders still require an independent appraisal. A professional appraiser will take into account the exterior condition of your home, the interior condition, the roof, the floors, windows, doors, ceilings, square footage, number of bedrooms and bathrooms, and more. Other factors are kitchen appliances, amenities and safety features, such as an outdoor kitchen and smoke detectors, and security systems.
“There’s a certain notion that something is worth whatever a buyer will pay, but your lender has a different view. That’s why lenders require an appraisal, which is an evaluation of the current market value of the property. Ideally, the appraiser will have experience and local knowledge…All appraisers must be licensed and certified by their state regulatory agency. They must abide by all state and federal regulations, including the Uniform Standards of Professional Appraisal Practice.” —Realtor.com
All of these considerations are compared to existing homes in the neighborhood, which ultimately allows the appraiser to come to a conclusion about the value of the home. Lenders rely heavily on this figure because it ensures the worth of the collateral of the transaction. If the appraisal comes in at-parity with the agreed contract price for which you are selling your home, that’s good news. However, if the appraisal amount is lower, then you can do a few things to raise the value of your home.
Ways to Increase a Home Appraisal
The best thing to do, well before you put your home on the market for sale or apply for refinancing, is to make sure your property is in its best condition. Sellers aren’t usually keen on making repairs and improvements, because they won’t be in the residence much longer; and, homeowners who are refinancing also want to keep their expenses to a minimum. If you want to get a high appraisal, do the following:
- Give your curb appeal a little pop. Landscaping can work wonders and it can also increase the value of your home. If you improve the curb appeal, do so reasonably, which will raise your home’s value, but, if you go overboard, it might actually have a negative impact on the value.
- Paint the exterior, if needed. Peeling paint is going to be a huge factor and one that decreases the value of your home. Brush on a fresh coat to boost your home’s worth. Should it be brick, then have it pressure washed to give it a fresh, clean look.
- Make necessary repairs. If something is broken, fix it, no matter how small. Appraisers will check everything and when they encounter items in need of repair, will take points off the value of your home.
- Make small improvements. You don’t have to redo the kitchen or remodel the bathrooms. Small, cosmetic upgrades work wonders. Switch the old cabinet pulls for new ones, install new faucets, and you’ll make the spaces up-to-date.
- Clean-up the mess. Buyers don’t like messy homes and neither do appraisers. In fact, experts say that a clean, well-organized home can appraise for as much as 10 percent more.
Another thing you can do is to get rid of outdated decor, appliances, and other things. Appraisers are subject to the same subliminal signals as the rest of us and when they see outdated furnishings, decor, appliances, and other items, they form a more negative impression about the home. Rid your home of outdated items and you’ll do yourself a huge favor.