Photo credit: lendingmemo.com
The low-value appraisal is feared by home sellers and refinancing homeowners, but Instead of fretting about low value appraisals, it’s best to plan and prepare to bolster the impression of the home before the appraiser comes out.
Paul Prentice, senior managing appraiser at PEMCO Limited, says “it is always recommended to take a look around the interior and exterior of the home to tie up any loose ends or projects that may be unfinished no matter how small they may seem. Unfinished work can lead to complications in the loan and appraisal process and if the appraisal is written on an “As Is” basis can have a potentially negative effect on the conclusion.” Prentice stresses the importance of not unduly influencing the appraiser, “it’s important not to discuss the specific ‘needed’ value of the home to make the deal work with the appraiser. It is the appraiser’s job to remain as an unbiased third party and interpret the data at hand. Discussion of this can cloud the appraiser’s judgment and make remaining unbiased very difficult. It is acceptable to discuss recent sales in the neighborhood from which you as a borrower/homeowner may know of but refrain from mentioning the specific number necessary for the loan to yield a positive result.”
Prepare Your Home for an Appraisal in 10 Easy Steps
1. Do a walk-around with a critical eye. Look for any issues, loose floorboards, leaking roof, gutters not working properly that could lower your home’s value. These types of things show that the owner has responsibly maintained the property.
2. Be aware of the $500 rule. As a general rule, assume that small issues such as correcting old wallpaper, damaged floor tiles, or a broken door, will subtract $500 per issue from the total value of your home. It’s best to fix these small problems immediately.
3. Look beyond your house into the surrounding area. Be sure to point out any new schools, highway interchanges, stores or other amenities that were added since you purchased the house to the appraiser. This could be helpful in the event the appraiser may not be aware of these amenities, they could add value to your home.
4. Be sure to inform the appraiser of any home improvements made. New siding, gutters, HVAC unit, roofing, updated bathrooms and kitchens and new additions can positively reflect on your appraisal.
5. Do a little research on other homes in your neighborhood: what are the values of the homes similar to yours? What are the sales prices of the recently sold homes? What problems have they experienced during their appraisals? Much of this information can be found in public records or even ask your neighbors about their appraisal experiences.Update your home’s materials.
6. Update counter tops, paint or reface cupboards and replace old flooring. Keep the new materials neutral, but modern.
7. Safety equipment such as carbon monoxide and smoke alarms and home security systems should be installed and working properly.
8. Spruce up a little. Hang new curtains, repaint the walls, and install shiny new faucets and doorknobs. While making these updates don’t add up to much in an appraisal, they will give the home an updated appearance and positive impact on the appraisal.
9. Give your yard some attention. In addition to mowing your grass and trimming your shrubbery, consider removing any dead trees before the appraisal inspection. Add a little color with flowers and remove weeds from flowerbeds. High curb appeal receive better appraisals.
10. Clean up. Shampoo the carpet, wash the walls, declutter, power wash driveways, the exterior and decks.
ThinkRedDoor.com. 10 Easy Ways to Prepare Your Home for Appraisal
The Washington Post. How to prepare for a home appraisal