If you’re selling or refinancing a home, a home appraisal is just part of the deal. And it’s one part that you can very easily influence.
A little effort before an appraiser arrives at your home will go a long way to increase your home value for appraisal. And, believe us, it’s very difficult to influence your home value after the fact.
There are some really simple things you should do to prepare for an appraiser’s visit. Since you already did the heavy prep work prior to putting your house on the market, our tips are easy to do with limited funds and time. They’re great ideas for how to increase home value for appraisal.
If You Want to Increase Your Home’s Value Before Appraisal, Don’t Do This
Pat Tasker, who is among the top 5% of agents in Milwaukee, Wisc., assumed her clients knew how to prepare for an appraiser’s arrival and what they could do to increase home value for appraisal. Hmmm. Not so much.
When she arrived on site to let the appraiser into her clients’ home, she couldn’t believe her eyes.
Dirty dishes in the sink. Laundry over the couch. The dog barking.
This wasn’t Pat’s first rodeo. Pat had never experienced this before in her 28-year career as a real estate agent. But, as they say, there’s a first time for everything.
To avoid a similar fate as Pat’s clients, all you need to know before an appraiser arrives at your home is what an appraiser does, what they look for and how to prepare for their visit to increase home value for appraisal.
What a Home Appraiser Does
Knowledge is power as they say. Since it’s good to know what you’re up against when preparing your home for an appraisal, let’s start with a review of an appraiser’s job. What is it that they do?
A home appraiser’s job is black-and-white: determine the current fair market value of your property. As a seller, you want to do everything in your power to help the appraiser believe in your asking price.
Although fresh-baked cookies might work to help prospective buyers see themselves making your house their home, this clever tease is lost on appraisers.
Your best Betty Crocker skills should be used for the showings.
However, there are still things you should—and must do—to make sure your home is appraised effectively.
- Make sure you use a qualified appraiser.
- Put yourself in the appraiser’s shoes. See your property the way they will—through a very critical eye.
- Use your understanding of the appraisal to prepare your home in the right way.
How to Find a Qualified Home Appraiser
If you have your heart set on hiring your brother’s best friend’s wife (who is a member of the Appraisal Foundation) because you know she will give you a good price, think again. The buyer’s lender will hire the appraiser. They want to protect their investment and get what they are paying for.
That doesn’t mean you’re at their mercy.
The government’s on it. Regulations put in place by the Federal Housing Administration back during the financial crisis mandate a fair appraisal by a neutral party. Most lenders use an appraisal management company that draws from a list of qualified appraisers. Plus, no matter who is hired to do the appraisal, they must be certified in the state you’re in and, in most states, conform to the Uniform Standards of Professional Appraisal Practice.
What the Home Appraiser Looks For
Just imagine your home after you strip out your personal items—THAT is what the appraiser cares about. So, even though your custom-made living room furniture would make any interior designer swoon, it will not impress the appraiser at all. Custom-made furniture, no matter how lovely, isn’t part of your home’s value for appraisal.
The quality and condition of the “bones” of your home will be assessed and recorded by the appraiser. Ultimately, this info is combined with comps to determine the market price of your property.
Here’s what a good home appraiser will focus on in the one to two hours they are at your home:
Appraisers Measure and Verify the Lot Size
They walk the property to visually confirm its condition and to record the layout of the property.
How to Increase Your Home Value for Appraisal
Just as you would when showing your home or preparing it for listing pictures, make sure that your home’s street appeal is impeccable. If there is a dead branch on your tree, cut it out. A shaky fence post? Secure it. These are minor updates that won’t cost you much, but as Pat says, you shouldn’t “give the appraiser any opportunity to write up a work order.”
Appraisers Assess the Condition of the Exterior
The appraiser will inspect the quality of siding, foundation, exterior paint, roof and outdoor amenities such as landscaping, sprinkler systems or swimming pools.
How to Increase Your Home Value for Appraisal
Depending on how much time has lapsed since your home first went on the market, its exterior might benefit from a power washing, fresh mulch and paint touch-ups. Be sure to inspect the roof, so you can fix any missing shingles prior to the appraiser pointing it out to you.
Appraisers Conduct a Room-by-Room Assessment
The appraiser looks at the material, quality and condition of all fixtures, appliances, flooring, plumbing and whatever will be left behind when you move out including:
- Plumbing fixtures (toilets, showers/tubs, faucets)
- Interior paint quality
- Air conditioning unit
- Lighting fixtures
- Basement finish
- Security system
How to Increase Your Home Value for Appraisal
Now is not the time to have a leaky faucet or running toilet. These are easy fixes and should be taken care of before an appraiser arrives. Arm yourself with a paintbrush and be sure to touch-up your paint from the normal wear and tear of living.
What You Should Do to Prepare for the Home Appraisal
“You don’t have a second chance at that first impression,” Pat says. “You need to have the house looking as good as it looked on the day you had the photos done.”
Hello, deep cleaning!
Technically, the cleanliness of your home shouldn’t impact the appraiser’s value of it. But, the appraiser is human, so anything you can do to make the appraiser’s time at your home as pleasant as possible helps increase home value during the home appraisal.
No matter who they are, pleasant conditions improve performance, and you certainly want the best performance out of your appraiser when they are at your home.
Be helpful and accommodating. Treat the appraiser visit with the same principles and prep as you would a potential buyer’s visit. It starts from the moment they contact you to schedule the appointment.
“I tell my sellers I have to sell the house three times. I have to sell it to the agents to get their buyers in. I have to sell it to the buyer to actually write an offer. Then I have to sell this price to the appraiser,” Pat explains.
You want to avoid putting any negative thoughts in people’s minds about your home—whether they are the buyer’s agent, the buyer or the appraiser.
“[Home appraisers] have little cash registers in their minds and anything they see that is not in good condition, they will deduct that amount from the value,” Pat said.
Pat likes to attend every appraisal on behalf of her clients, even though that’s not standard practice for most realtors.
She learned this lesson the hard way, when an appraisal came in $10K under the selling price.
Why You Need Your Real Estate Agent Present at the Home Appraisal
Turns out, the lender hadn’t sent over every page of the offer, so a $10K counter offer was missing. If Pat would have been on site during that appraisal, she would have uncovered the error then; however, once the appraisal is complete, it’s nearly impossible to change it. According to Pat, once the appraisal is complete, there’s less than a 10% chance the appraiser will change the value.
Now, Pat is always on site for the appraisal to be “proactive to protect the transaction and the value I have in that offer.” And, it’s paying off for her clients. Here’s just one example.
Pat was contacted by a man to help sell his condo. Unfortunately, he had lost his job so needed to sell a condo that he recently purchased for $50K. When she started her research, she found out that the market value of the condo was $75K. Since the turnaround time was so short between buying and selling, his first purchase ended up being one of the comps the appraiser pulled.
Turns out, the property had been donated to a church after the death of one of its members. The church didn’t want to deal with homeowner’s fees or upkeep on the condo, so they were motivated to sell and sell quickly—far below market price. Since Pat had the information to explain why this was not a normal sale, she effectively impacted the appraiser’s report and got her seller the fair market value for the condo.
This would not have happened without her being on site for the appraisal and having a conversation with the appraiser.
Even something as simple as getting to the house before the appraiser does to open the door is a way to start off on the right foot.
Most of Pat’s clients do the heavy lifting to prep their homes to be “show ready” before they put it on the market. They follow the advice of experts to declutter and clean to make sure the home looks the best it can from the buyer’s perspective. Even if this prep delays you from getting it on the market, Pat finds that it’s time well spent.
Home sellers or their agents can be on site during the appraisal, but their role is to be super helpful and accommodating. Don’t follow the appraiser from room to room, just be available with information and to answer questions as they come up.
Here’s a List of 7 Documents You Should Have Ready for the Appraiser
1. Complete offer: As Pat shared, if the finance company doesn’t send over the complete offer, it could cause your appraisal to come in under where you need it to. When you have a hard copy of the entire offer on site, you can resolve any discrepancies before the appraisal is done.
2. Data sheet: Provide the appraiser with floor plans, specifications, surveys, deeds and features of the property so that they have confirmation of what they see and don’t miss anything.
3. Tax valuation from the municipal record: Another data point for comparison is the tax valuation of the property.
4. List of all the upgrades done to the home with dates and cost: To ensure the appraiser doesn’t miss any upgrades you have done to your home, provide a list, completion date and cost for every upgrade you have done.
5. Listing history: The listing history includes each sale of the property, when it happened and how much it was for.
6. Comps: The appraiser will pull their own comps—the value of houses that recently sold in your neighborhood—but it’s always a good idea to have your own. Also, be prepared to explain large variations in prices.
7. Bad comps (to point out ones not to use and why): If an appraiser pulls a comp that might skew your value, but you know it’s a bad comp, you must be prepared to explain it.
These Tips for How to Increase Home Value for Appraisal are More Than Worth the Prep
By the time you’re preparing for the appraiser’s visit, you really are in the final stretch of your home selling experience. A top local real estate agent who is familiar with your market can help you focus your efforts to increase home value for appraisal.
There’s no doubt that you can positively influence and even increase the home value for appraisal quite easily and with very little time or expense. And when the appraisal comes in at or above your asking price, you’ll be glad you spent the effort.