Ready To Sell? Make Sure Your Home Appraises For Maximum Value!

Hank Bailey
Hank Bailey
Published on March 13, 2019

Did you know that there are two words or phrases in the home selling process that throw most homeowners for a loop? Those are “home inspection” and “appraisal.”

Yet the appraisal in itself can have a major impact on the home’s final sales price or value, and thus, how much money you as a seller can expect to walk away from after closing.

While either can break the sale, the appraised value isn’t something you can negotiate, at least note as far as the bank is concerned. This is why it’s so important to work with a real estate agent to determine the current market value of your home. Then, do everything you can to ensure that the appraiser agrees with that value.

What’s “Value” To An Appraiser

Real estate consumers, buyers and sellers, at times don’t understand the appraiser’s role in the home sale process. For instance, although the buyer pays for the appraisal, it belongs to the lender, not the buyer.

By law, however, a copy of the appraisal must be given to the buyer at least 3 days prior to closing, according to the Federal Bureau of Consumer Financial Protection.

Residential appraisers take a multi-pronged approach to determining your home’s value. Well that sounds complicated doesn’t it? Yet it’s not really so tough to follow when you know the things they look for when appraising a home. A huge item that appraisers consider, which a homeowner has no control over, is the local housing market, which is impacted by economic, social, and other forces.

The appraiser will use all of these factors as a backdrop when he or she studies your neighborhood as well as your home’s characteristics and competitive properties to arrive at the home’s appraised value.

Bill Gassett, a nationally recognized Real Estate blogger in Massachusetts offers some thoughts in a recent post entitled, How to Prepare for a Real Estate Appraisal, “Preparing for a real estate appraisal is easy when you know what the appraiser will be looking for.” Bill Gassett in this post also references a list of what the appraiser will be appraising on your home.

  • The condition of the exterior of your house.
  • The condition of the interior of your house.
  • The overall size of your home.
  • Any recent upgrades you may have done to your home.
  • Whether your home is modular construction or stick built.
  • The neighborhood in which your home is located. This would be known as neighborhood appeal.
  • The desirability of the lot your house is located on.
  • The school district you are located in.
  • Any unusual factors which could affect the property both positively and negatively.

He adds, “These are all things that will impact the value of your home. There are also extraneous features of an area that can have a negative impact on your property value.”

There’s Value In Being Well-Maintained and Clean 

If your home is well maintained, and you handled it with kid gloves over the years, it may fly right through the home inspection. A well-maintained home will also impress the appraiser. Sure, making small repairs, tuning up the home’s curb appeal, and meticulously cleaning the home will help you too.

Also know that the home’s condition, however, will have a direct bearing on its appraised value.  This is known among appraisal professionals as the Condition and Quality rating in the appraisal industry. Condition ratings can range from C1 (for new construction) to C6 for homes with severe deferred maintenance and defects ‘that may impact the home’s habitability.’

During this phase of the evaluation, the appraiser will also consider improvements you’ve made to the property.

Author and Realtor Bill Gassett adds a reminder from his post, “Remember every $500 matters. The $500 example is the idea that appraisers tend to measure the value of a home in increments of $500. If you have some minor repairs that need to be done and you leave them for the appraiser to find, he or she is likely to knock some value off of your home.

Things like broken doors, non-functional locks, faulty light switches, leaky faucets, and other minor issues are cheap enough to repair and will help you avoid lost value and increased scrutiny on the part of the appraiser.”

He continues, “Again, this falls under the category of condition (Condition and Quality rating) which an appraiser will be grading while visiting the property. Blatantly obvious repairs can affect the value of your home.”

Supply The Appraiser With All The Details

The appraiser won’t give you credit for what they don’t know! Don’t assume the appraiser will notice any upgrades you’ve made to your home. Make a list with dates they were performed, and an approximate cost for each item.

Be specific in your explanations or descriptions too! Rather than say, “Bathroom remodel,” be very specific. “Bathroom remodel: new tub; travertine tile work; cherrywood cabinetry; Kohler sink, faucet, etc. …/Installed 2009/$15,000 cost.”

In fact, here’s a handy information sheet you can download, complete, and offer up to the appraiser when he or she visits the home.

At the end of the day, there isn’t anything you can do to change the market trends that influence your home’s value, but take care of the items that are within your control and you’ve at least done the best you could to enhance your chances of maximizing your home’s value.

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