How to Prepare Your Home for An Appraisal
We’ve all heard the expression about accepting the things you cannot change. Luckily, your home appraisal is not one of them. It’s true that you can’t change your neighborhood and the value of other homes in your community, but there are things you can change – and do – to prepare your home for the appraisal process.
Preparing your home for sale (or a refinance) involves fully understanding the appraiser walk-through and how it translates to getting the maximum value for your home. A home appraisal is typically part of mortgage lender requirements, though it’s not performed by the lender. Instead, an independent state-licensed real estate appraiser evaluates your home to objectively determine its current market value. At a high level, the appraiser looks at the home’s overall condition, interior and exterior features, the value of comparable homes nearby and real estate market trends of the surrounding area to help determine an accurate value of your home
Here are our top tips to maximize the appraised value of your home.
1. Clean the interior of your house:
While this simple piece of advice may seem obvious, cleaning your house for even just a couple of hours can directly affect the appraisal value. A deep clean of every piece of furniture in your house isn’t necessary, but you should at least clean it to the same level you would for a nice dinner party. Doing so will not only show the appraiser that you take care of your property, but you’ll have the opportunity to spot potential problems and correct them before the appraisal. Clean up common areas and give a little extra organization to the kitchen and bathrooms. Don’t neglect windows, countertops, carpets, doors or door frames. It’s also helpful to get rid of clutter as part of cleaning, so clear your countertops, put away dirty dishes or dirty laundry and put everything back in its proper place. Pay attention to detail when you prepare your home for the walk-thru and even consider having a trusted friend give your interior a quick look to spot things you might miss.
2. Maximize curb appeal:
Because the exterior of a house is the first thing an appraiser will see when he or she arrives, it’s important to generate as much exterior curb appeal as possible. For most homeowners, this means mowing and edging the lawn, clearing all weeds from the garden, and trimming vines and hedges in prominent locations. You can also plant some bright flowers and healthy shrubs to improve the overall aesthetic. Make sure to keep them watered, of course, and consider adding a layer of mulch to flower beds.
Next, turn a critical eye to the exterior of your home. Do you need to touch up chipping paint, clean out any leaf-filled gutters, blow debris off the driveway and sidewalk or maybe even pressure wash areas that look mildewed and uncared for? Finally, declutter your front porch or stoop (and even the lawn if there are items laying around like kids or pet toys).
3. Invest in new appliances (or at least repairs):
In an otherwise spotless kitchen or living room, an old and worn-out refrigerator or television can make the entire room look old. By replacing outdated appliances with newer ones, you can increase the appraisal value of your home by hundreds or even thousands of dollars. On a related note, and perhaps even more important, make sure everything works. This includes not only appliances but also heating and cooling systems, smoke detectors and carbon monoxide alarms, garage doors, faucets and shower heads, and even light bulbs. While your appraiser may not walk around flipping on every light switch, you still want everything to be functioning properly during the visit. A burned-out light may convey to the appraiser that, since you don’t take care of small updates, you don’t necessarily take care of larger, more important ones that could be of material value to the home.
Keep the $500 rule in mind. Appraisers tend to think of a home’s value in terms of $500 increments. So as you consider whether to complete certain repairs, remember that spending $500 or less can increase the value of your home (while opting not to complete minor repairs could potentially decrease it.) Create a checklist ahead of time so you can keep up with the repairs and improvement projects you plan to complete prior to the appraisal.
4. Consider repainting walls and rearranging furniture to brighten rooms and maximize space.
In many homes, repainting the walls can freshen up the atmosphere and make the interior look much newer, which can significantly increase the appraisal value. Choosing a neutral color can also add value to your home. Open curtains and blinds to let in plenty of natural light, and position mirrors to reflect even more light.
In terms of rearranging your furnishings, remember that a room with too much furniture can seem cluttered, no matter how big it is. As such, you should minimize the amount of furniture in your home to emphasize the openness of each room. Do what you can to make each room feel warm and inviting.
5. Detail your improvements.
Prior to the appraisal, create a list of recent home improvements and major upgrades to share with the home appraiser. While not everything may count (a new coat of paint does not), upgrades and the money you’ve put into them can increase your home’s value. So, include things like a remodeled kitchen, a new fence, a new HVAC system or outdoor fireplace. You can even share receipts and warranties if they are requested.
6. Research comps.
Your neighborhood matters. Familiarize yourself with comparable properties in your area and what they are worth. A real estate agent can provide you with the final selling price of nearby properties that have sold within the last six months. He or she can also help with determining what your home is worth prior to the appraisal and can even assist you with walking through your home ahead of time and to help you prepare for the appraisal.
Before, During and After the Home Appraisal Process
So, what happens before, during and after the appraiser’s visit? After your mortgage lender orders the appraisal, a third-party Appraisal Management Company (AMC) will reach out to schedule an in-person time. Plan to be present for the appraisal, and think about last-minute preparations, which should include making a plan for pets and children as you don’t want them to interfere with the appraiser’s walk-thru. Set the house to a comfortable temperature. When the appraiser arrives, greet them courteously but then hang back during the appraiser’s visit. Resist the urge to follow them from room to room with running commentary; just let them do their job. The appraiser will walk around, measuring square footage, taking pictures, checking the status of major systems in the home, and looking at structural integrity.
After the appraiser is finished, don’t worry about paying them at that time; appraisal fees are part of your mortgage closing costs for a home purchase or refinance. You can expect them to finalize the appraisal report and provide it to your lender within a few days or weeks; you should also be entitled to a copy of the report. The report will detail major vs. minor issues. Major issues such as electrical, HVAC or plumbing will likely require repair. Ideally, the home’s appraised value will come in at or above the asking price, and ultimately, the loan value is based on the home’s appraised value not just the asking or sales price.
The bottom line? In today’s housing market, a well-executed home appraisal can add thousands of dollars of value to your home. So it’s important to prepare your home long before an appraiser ever arrives on the scene.
Still have questions about home appraisals or financing requirements? Get the scoop on the “In’s and Outs of Appraisals” or learn more about our various home loan programs.