A home appraisal is part of the final stretch before selling your home and must go smoothly before you can celebrate a done deal. The National Association of Realtors reports that appraisal issues in May 2020 accounted for 18% of delayed contract settlements and 6% of terminated contracts.
Using our home appraisal checklist, curated with the help of industry appraisers and real estate experts, you’ll easily prepare for and navigate this crucial step and head to the closing table without major hiccups.
Checklist: 11 home appraisal to-dos for sellers
After you accept an offer, the buyer’s mortgage lender contacts a third-party appraisal management company (AMC) to perform an appraisal. A residential home appraiser’s job is to provide an impartial opinion of your home’s fair market value so the lender knows that the house is worth what the buyer asks to borrow for the purchase.
To conduct an accurate evaluation, the appraiser will evaluate local comparable sales and conduct an onsite visit of your property to evaluate an array of external and internal factors.
Keep in mind that at this stage in the game, you aren’t going to dramatically increase your property value with any last-minute preparations. However, you can help to ensure the appraiser has a good experience and has all the relevant information they need to come up with an opinion of value.
1. Research your home’s value
Before arranging for when the appraiser can visit, our experts suggest getting a ballpark idea of what your house is worth, especially if you’ve lived in your home for a while. That way, you’ll know if the appraised value is off or if it’s reasonably accurate.
Although appraisal surprises can happen, most homeowners seem to have a good perception of home value, according to Quicken Loans’ National Home Price Perception Index. Data from October 2019 shows that appraisals were an average of 0.45% lower than what homeowners expected, with those in metropolitan areas less than 2% lower or higher than what homeowners thought they might be.
Here are a few resources to review:
Online tools to check your asking price
Online tools such as HomeLight’s Home Value Estimator can provide some help here, using information from multiple sources based on current market trends.
However, the algorithms these estimators use can’t measure every detail like an appraiser can, such as recent upgrades that the tool didn’t include in its calculations. When you answer our 7 question quiz, we can predict your home’s current value with far greater accuracy:
Consult the CMA from your agent
Another resource is the Comparative Market Analysis, or CMA, that your agent prepared to arrive at your asking price. This involves examining about 10 “comps,” or properties that are comparable to your home in size, location, and amenities, such as a swimming pool.
Consider a pre-listing appraisal
Although the buyer pays for an appraisal after submitting an offer, some sellers pay for their own appraisal before listing. This can crop up when parties sell property during a divorce, or when comparable properties and market locations in your area may be tricky to determine.
A buyer won’t always trust a pre-listing appraisal, or the lender may require a separate one regardless. But this can help set your asking price and give you a heads-up about potential appraisal issues. Expect to pay about $340 on average for an appraisal, although depending on property size and complexity, some cost as little as $250 or as high as $600.
2. Make sure your property is accessible
To help an appraiser see your home in the best light, consider the appraisal like a showing. That means ensuring access to the attic, a basement, or any usable living space.
“We’re looking at the 30,000-foot view. We’re not crawling under the house and looking for termites,” as a home inspector would, says Mason Spurgeon, a certified general real estate appraiser since 2004 who handles appraisals in Missouri, Illinois, and Iowa. Even so, he does need to view the structure accurately.
3. Put together a home fact sheet with your agent
Gather relevant paperwork or digital documents for the appraiser, including:
- the most recent tax receipt
- any homeowners’ association or condominium covenants and fees
- information about nearby schools and walkability
- a list of major home improvements and upgrades, including the date of their installation, cost (include receipts), and permit confirmation (if available)
Spurgeon finds the tax receipt particularly helpful because it lists parcel numbers. A deed or similar paperwork also will contain the property’s legal description. “Throw as much at us as you can,” he said. “We can sort out what we need and don’t need. The more forthcoming and honest you are, the less likely we are to keep digging.”
4. Make minor repairs
If there’s a piece of trim missing, fix it, along with any other minor issues that you haven’t addressed. An appraiser will evaluate the materials and general condition of your home and will notice items such as missing door handles, leaky faucets, peeling paint, and so on.
If your home needs a major repair that a buyer reasonably would expect, such as a broken window or leaky roof, get an estimate of the cost, Spurgeon suggests. The appraiser can factor that into their report.
“Tell us that the hot water heater needs to be replaced, or the roof leaks over here, and here’s what it will cost to cure,” or repair or replace, Spurgeon says. “We can appraise as if the roof were fixed and deduct the cost.”
Otherwise, the appraiser may note that the home needs a structural engineer or estimate a different cost. “I might have it in my head that it’ll cost $20,000, and that will hurt your appraisal,” Spurgeon says. “It’s different if you have a bid to fix it for $2,000.”
5. Tidy up the house inside and out
“When we get a home ready for photos, the same stuff we’re telling the homeowner or a stager to get it in tip-top shape is the same condition that we want to have it in for an appraisal,” says Shane Neal, a top real estate agent in the San Antonio, Texas, area who completes 18% more sales than the average agent there.
If a homeowner is packing to move during the sale, an appraiser understands some disarray. “I don’t appraise housekeeping,” Spurgeon says. “If there are clothes lying around, that’s not going to bother me so much.”
But general clutter might leave the impression that you haven’t kept up with maintenance. “Don’t underrate curb appeal,” says Mike Ford, a Southern California-based general certified real estate appraiser since 1986. “It’s also indicative of overall maintenance levels.”
If appraisers use Fannie Mae’s Uniform Residential Appraisal Report, they’ll include photographs of the front exterior, back, and street scene, plus sketch the exterior of the property. “You want them to have the impression that it’s well taken care of,” Neal says. “You don’t want to put that stigma around it by having an untidy house.”
Use our comprehensive deep cleaning checklist so you don’t miss a spot.
6. Secure any pets
Depending on your property’s condition and size, the appraisal process can be a quick 15-minute visit or a two- to three-hour examination. To ensure that any pets aren’t in the way — and don’t inadvertently get loose — secure your pets in a kennel in a room, or take them out while the appraiser is there. Some of Neal’s clients put their dog in the car and drive around the neighborhood until the appraiser is finished.
7. Plan to be away yourself
If you’re protective about your home, our agents say it might be best to leave for the appraisal and confer with your agent afterward. This way, the appraiser has room to work, and you’re not reading into whatever they do.
8. Be patient
Expect to wait a week to 10 days for the appraisal report, depending on the market and how busy the appraisers are. Certain loan types also can take longer; for instance, VA appraisers can take 10 to 14 days, Neal says.
9. Ask to review the appraisal report if there are any issues
People make mistakes. An appraiser’s measurements might record a home as 1,800 square feet, but the county property records and builder plans list the home as 2,000 square feet. Your agent can submit that information and request the appraiser change their valuation. “We’ve had that changed where they realized that they mismeasured by a hundred square feet,” Neal says.
Another issue may be that a comparable property the appraiser used turned out to be a distressed property, foreclosure, or short sale. Again, your agent can research why that price was much lower and provide supporting data, including some comps that show a normal market value.
10. Plan to negotiate
Sometimes an appraisal report has no errors and comes in under value anyway, such as in a situation with multiple offers and lots of demand. Your agent can speak to the lender and ask about resubmitting comps to support the agent’s calculations. However, depending on the loan, the lender may not allow that, so negotiating with the buyer about how to handle the difference is your best option.
“Are they wanting us to lower the price to the appraised value? Are they presenting that they will pay half of the difference? It becomes a whole other negotiation,” Neal says.
If no one wants to budge, the parties can terminate the contract, but this tends to happen only if the appraised value is “off the wall,” Neal says. “If it’s close enough within value, they’ll do some sort of negotiation to try to make it a win-win.”
11. Clear the appraisal contingency, and get to closing
In the end, the best way to clear your home appraisal and move on to closing is to set the right expectations. Talk to your agent about what the appraisal entails, what could happen, and how you’d like to work through it.
John Brenan, chief appraiser at Clear Capital, a Nevada-based financial services firm, estimates that only one in 10 properties, or 10%, miss the mark. Spurgeon puts this at 20%, or 1 in 5 appraisals. So, in the majority of cases, it should be smooth sailing from here.
“Ultimately, it’s just ensuring the appraiser can do his job effectively with the least amount of stress, and make sure if they have any questions, we’re there to help,” Neal says. “We’re all trying to get to the same goal here.”
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