Did you know that a home appraisal is one of the largest reasons contracts fall through?
It’s true, it ranges anywhere from 8% to 20% depending on the market you’re in. If you find yourself in that small percentage, it’s a big deal. In this blog post, I’m gonna give you four tips and tricks for home appraisals.
- What is an appraisal?
- What do appraisers look for?
- What hurts an appraisal?
- What to do if a low appraisal comes in?
Here’s how Home Appraisals Work
What is a home appraisal?
A home appraisal is the opinion of the value of your home based on the data gathered from the market. It doesn’t matter what the buyer is willing to pay or what the seller is asking. Often, when markets are moving fast like we are experiencing with a sellers’ market right now, appraisers struggle to keep up because they have to look at sales in the past when there is not much inventory available to appraise.
What do home appraisers look for? And what can you do?
Have you done anything to make your home energy efficient? Have you replaced the windows? Maybe you put in a new efficient hot water heater? Have you added solar power? Whatever it might be, becomes very, very important. Fencing is a good plus that appraisers look for.
Have you replaced your roof? Has it been leaking? Can you see leaks within the home? That deferred maintenance really hurts If you haven’t taken care of your home… If your roof is in need of replacing, replace it; this adds a lot of value when you are selling the home.
Compile a brake sheet, it doesn’t matter whether you do it or your realtor does, but make sure you list all of the improvements that you have done for your home. That way this sheet can be handed to the appraiser when they come and take information back to do your appraisal.
Make sure that the appraiser is geographically competent. This is where your Realtor comes into play, when they’re meeting with the home appraiser they’ll make sure it is someone who’s familiar with the area. Buyers, when you are working with your lender, ask if the appraisers are going to be locally competent. So when they do your appraisal that they’re gonna be fair to you to make sure that this deal works.
What hurts on a home appraisal that you can control?
So typically not having a realtor can really, actually hurt you because realtors will place a property for sale at current market value which really works together with the appraisers.
Deferred maintenance; if you’ve neglected anything around the home, it needs paint, scuff marks, and landscaping hasn’t been kept up. All of those things even the landscaping don’t add a lot it’s that whole curb appeal that appraisal we’ll look at the condition of the home.
As I mentioned before your roof, make sure that either your roof has been repaired or replaced if it’s end-of-life.
Dated or undesirable finishes. So, you can’t have avocado green appliances and yellow harvest gold appliances. You need to have brought it up to date ’cause that’s really going to count when the appraiser is marking the condition of a home.
Over improvement, if you live in an area where let’s say that most of the homes are tile or carpet, and you put in marble floors where you’re really not gonna get credit for that over improvement. Also if you have done improvements and updated your kitchen, please make sure that it’s with current color schemes for instance if you have quartz counters, don’t have green and white appliances that will not give you the credit for improvement that you would want.
And also there are things called obsolescence. So for instance, a home with one bathroom when most have two or the floor plan is a little outdated. Now, this does not mean that older homes don’t appraise, they will as long as they’ve been maintained and kept up to date.
Factors you can’t control in a home appraisal
There may not be comparable properties in your area for an appraiser to look at the market comps while we’re in a seller’s market. With homes selling at higher and higher prices, but some of those sales haven’t closed yet. Whether you want to sell for a certain price or a buyer looking to stay on budget you know there are no other homes at this price range. That’s what can actually be very challenging for the appraiser. So the factors that may or may not affect your appraisal could be location. It’s in a good school district, with busy streets, and the home layout as I mentioned whether it’s obsolescent or a good layout.
What can you do if you come in with a low home appraisal?
Well first off, have a challenging look to see did they use current comparables. Make sure that the comparables that they did use, are really equivalent to your home. Sometimes you can challenge that appraisal if you do find these mistakes and if you can’t then at that point and that’s where it is and you can’t order another one then there are three things that can happen:
One, either the buyer can bring more money to the table and it doesn’t mean that the appraiser has the correct value of the home, it only means what they could find for sold properties at the time. So even if you have to bring more money to the table it doesn’t mean that you’re paying or overpaying for the home.
Two, the seller comes down in price.
Three, the deal is over.
I mean that’s just what’s gonna happen with the appraisal but I can tell you if there is a motivated buyer and a motivated seller you can make any contract work.
Have you had a home appraisal come in low, or want to prevent that from happening?
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I’m Maria Wells, Broker Owner of Lifestyle Realty Group on the Treasure Coast of Florida 🏝 serving, Palm Beach, Martin and St. Lucie Counties. I have expansive knowledge to share with my clients having been 2017 State President of Florida Realtors the second largest state trade organization serving 180,000 members and 2019 Region 5 VP for the National Association of Realtors. I live in Jensen Beach Florida with my husband, where we raise Orchids🌸, polish up our Harley’s 🏍 and enjoy our grown children and one new grandson.👶🏻 🍼 Its Just About Real Estate with Maria Wells for YouTube Photos 🎥 by Dragonfly Aerials – dragonflyaerials.pics Video’s and information provided in collaboration with the shy, dog loving 🐶, Realtor, Valerie Terrett GRI PSA. Guest appearances will happen from time to time.
