Everyone wants to sell their house for more than they bought it for, but the real estate market is constantly fluctuating, making it trickier than it may seem. When the market changes, so do home values. That’s why a home appraisal is so important!
Here is a breakdown of the home appraisal process, which will hopefully shed some light on different ways you can ensure the highest appraisal value for your home.
What is an Appraisal?
An appraisal is an estimate of how much money your property is worth, but it can change based on current market conditions.
Homeowners sometimes confuse a home appraisal for a home inspection. A home inspector makes a list of things that need to be fixed in the home.
An appraiser, on the other hand, looks at a home’s location, size, and overall condition, and then compares it to similar homes in the market to see what they have recently sold for to determine the value for your home.
Do I Need a Home Appraisal?
Yes. Anyone with a mortgage loan needs to have a home appraisal. In fact, almost all financial institutions will not lend you money for a house without an appraisal. The house you are buying is the collateral for the mortgage loan you are receiving from the lender.
Banks don’t want to pay more than the house is worth. If an appraised value is determined to be lower than the asking price, buyers are able to use the number to ensure they aren’t overpaying.
How Long Does the Appraisal Process Take and Who Pays?
The appraisal process can take anywhere from a few days to a few weeks. Gathering the data and photos can take some time for the seller and real estate agent.
The home appraisal will usually be paid by the seller at closing. The national average cost for a property appraiser is between $300 and $400.
What are Appraisers Looking For?
Appraisers are looking at the physical characteristics of the property, such as square footage, number of bedrooms and bathrooms, the age and condition of the home, location and various other factors.
So, don’t think that your interior design and custom-made furniture will be part of your home’s value for the appraisal.
What’s most important to the appraiser is your home’s physical characteristics and observable condition.
How Can I Ensure a High Appraisal Value?
There is nothing you can do once the appraisal starts, but you do have the opportunity to spruce up some things before the appraisal.
First things first: it’s important to have the property look as good as it possibly can. You want to help the appraiser see your property’s potential and to make a good impression from the start.
This is why it may be a good idea to do a deep cleaning of you home before the appraiser comes by.
You can also make those small renovations and maintenance repairs you have been putting off for some time, such as leaky faucets or an overdue remodel of your kitchen.
However, keep in mind that just because you spend $10,000 on your remodel, it does not automatically mean your house will be worth that much extra. But it can help your home appraisal to a certain extent.
You should also make a list of improvements that you have made to the house and when you did so. List things like new appliances, a bath remodel, roof replacement, etc.
Here is a quick breakdown of what sellers can do before the appraisal:
- A deep cleaning of your home
- Improving curb appeal (trimmed lawn, planting, decor)
- Small maintenance repairs (leaky faucets, painting)
- Make a list of improvements