Here’s What to Expect From A Home Appraisal So You Don’t Blow It

With a stellar offer in hand, you’re holding your breath for what comes next: the dreaded home appraisal.

The reality is that 25% of home sales get delayed before closing, and appraisals cause 20% of those delays, according to data from the National Association of Realtors.

James Krueger, who ranks in the top 1% of seller’s agents in Houston, once sold a house that went through three potential buyers. The first two backed out of the contract after the appraisal came in low. The third ended up purchasing the home but meeting in the middle with the seller on the asking price and the appraised value.

If all this sounds dicey, it is! And there’s no getting around the home appraisal if your buyer is taking out a mortgage to purchase your home. But if you go into the process clueless, you could make a major misstep, miss out on opportunities to sway the odds in your favor, or kill the deal because you didn’t know your options.

Let this advice from top real estate professionals who have been through hundreds of home appraisals guide you through every step of the way.

Before the Home Appraisal

At what stage during the home sale does the appraisal occur?

The home appraisal occurs after you accept an offer and usually within seven days after an inspector has reviewed your home.

In other words, once you and the buyer have worked out details about a price, repairs, and credits—essentially all the financial give and take—the lender will send an appraiser in to assess the fair market value of the home.

“Appraisals are ordered at the 11th hour of a home sale,” says professional home appraiser Mike Turner of Turner Real Estate Appraisals in Los Angeles.

That’s because they’re not cheap (more on that below) and getting the appraisal later in the process would add a lot of risk for buyers, who would have to pay for the appraisal before a seller accepted their offer.

Who pays for the home appraisal, and what does it cost?

It’s expensive. An appraisal normally costs between $300-$400, according to Angie’s List, an established home services website. Even though the appraisal is of your home, it is entirely the buyer’s responsibility to pay for the assessment.

The lender will usually hire and select an appraiser they work with regularly to perform the appraisal, and the buyer will submit their credit card or payment information to the lender to pay for the appraisal. As the homeowner, you’re not involved in the payment process at all.

What can you do to prepare for a home appraisal?

The future of your sale is in the appraiser’s hands, so be sure to prepare the house for an incredibly important guest.

“You’ve got to keep [the house] clean, you have to make it look really presentable for that appraiser,” Krueger says.

“There’s a reason [appraisers aren’t] sales people. They don’t have the most outgoing personalities. And they’re on a time crunch. They typically do four or five appraisals a day. So if the house is clean and it’s easy to get in and out of, it’ll make their job that much easier.”

Here’s a short list of things you can do to prepare for an appraisal:

  • Spend an afternoon cleaning up the yard.
    Pull any weeds, mow the lawn, trim the hedges, edge the grass, brush away cobwebs, and clear away leaves and debris.
  • Touch up your paint on the outside of your home.
    It may not seem like a big deal, but appraisers will factor peeling paint into their evaluation, especially if they are doing an FHA mortgage appraisal. If you don’t have extra paint in your basement, you can use a razor blade to take a small swatch from the wall (to be touched up later), and color match it at a paint store.
  • Deep clean the inside of your home.
    It’s a pain, but act like you are showing the house all over again to buyers. Use our essential guide to cleaning like you mean it to make sure you don’t miss a spot.
  • Make cookies and leave them out on the counter.
    This might sound crazy, but Sam Dogen, creator of Financial Samurai, one of the fastest growing personal finance blogs on the web, sweet talked his appraiser and shared her favorite butter cookies during the second home appraisal for his mortgage refinance. It did the trick. Hey, whatever works!
  • Get your real estate agent advocating for you. “We provide [comparable sale information] ahead of time if [the appraiser] asks for them,” Krueger says. “We also provide information about how we came up with the suggested price and any types of features or upgrades in the home that maybe the appraiser can’t see with their own eyes.”

during the home appraisal

During the Home Appraisal

What do appraisers look for in a home?

An appraiser’s job is pretty cut and dry. They come into the house and assess the value through measurements, photos, square footage, lot size, and number of rooms.

Nearly all appraisers use the same form during an appraisal, the Uniform Residential Appraisal Report. This form asks specific questions about neighborhood demographics, housing trends in the area, available utilities, measurements and details about the home, property condition, and how the house fits into the surrounding neighborhood.

Specifically, in addition to noting upgrades made to the property, appraisers are looking for the home’s:

Exterior Factors

  • Structure
  • Age
  • Location
  • Property site
  • Construction quality
  • Roof and foundation integrity
  • Gutters and siding
  • Parking
  • Exterior condition
  • Neighborhood

Internal Factors

  • Square footage
  • Functional layout
  • Number and size of bedrooms, bathrooms, and kitchens
  • Included utilities
  • Health and safety accoutrements
  • Appliances
  • Interior condition
  • Structural integrity
  • Code compliance

“Appraisers go for more of the black and white type view of a home,” Krueger says. “They don’t take a lot of the upgrades into consideration. It’s more the basics of the home.”

Their goal is to figure out how the home compares to other similar properties in the area. The appraiser will take the measurements and photos, find comparable properties nearby, and compile all the information into a report that pegs the home with a real-world selling price.

That’s why it’s important to keep the home in tip-top shape; if an appraiser sees a house that looks junky or unkempt, they’ll have reason to believe that the house itself hasn’t had proper maintenance, which would lower the value of the property.

How long does a home appraisal take?

All told, the actual appraisal process inside the home can take anywhere from 15 minutes to several hours.

While the appraiser is there: Should you stay or should you go?

Homeowners are not required to leave, but it may be for the best—that way you won’t be in any of the photos or getting in the way of any measurements.

If you do leave, take your dogs with you. You want present the house at its best, and that doesn’t involve crazy pets jumping on someone trying to do their job.

If you do stay in the house while the appraiser is there, stay out of the way, then feel free to chime in with any perks you can think of—like if the neighborhood has great amenities or major upgrades you’ve made to the house.

after the home appraisal

After the Home Appraisal

When will you get the results of the home appraisal?

Once the appraiser leaves, you’ll no doubt be anxious to know the value they’re giving to your home. Fortunately, you shouldn’t have to wait too long. The appraisal report should come back in less than a week.

As the seller, you won’t automatically get a copy of the report, but you can request one and the lender will have to provide it to you in 30 days time.

If the appraisal came in under the offer, your real estate agent will be able to fill you in on the details right away.

The report, which is typically about 10 pages or less (though some can stretch to 100 pages), will contain local comparable properties with photos and details of each property including the home being appraised, the appraised value, how the appraiser determined the value, and what factors the appraiser took into consideration.

How long does it take to close on your home after the home appraisal?

Once the report is in-hand, you have a couple options. If the appraised value is about the same as your buyers’ offer, congratulations! Get ready to close on your house.

“Once the appraisal is done, it’s just a matter of underwriting,” Krueger says. “I’ve even seen it where the appraisal is done and we close the next day.”

How can you challenge a low appraisal?

On the flip side, if the appraisal comes back lower than expected, you may have some extra work to do.

For Federal Housing Administration (FHA) loans, your options are limited. Whatever value came back with the appraisal sits with the house for the next 120 days.

But with a conventional loan, you have a few options:

Appeal your appraisal or order a second one.

In rare cases, the appraisal’s low value is due to a biased appraiser, overlooked upgrades, or outdated comps. In that situation, it’s possible to appeal the appraisal, which is know as a reconsideration of value. To do this, gather all the pertinent information that you think should raise the appraisal value and present it to the lender while asking for a higher valuation. It may not work, but put in the due diligence and things may turn out in your favor.

Krueger once saw a rise of $30,000 between the first and second appraisal on the same house.

Sellers can also order a second appraisal, but that can be expensive and often requires switching to a new mortgage lender, Krueger says.

Negotiate with the buyer to save the deal.

Oftentimes, the buyer wants to buy your home just as much as you need to sell it. That means even if the appraisal comes in high, you might be able to work out a deal.

Kate Silver, a Chicagoan who went through the appraisal process in April while buying a home, had to beat out nine other buyers and still hope the appraisal price matched her offer.

“There was definitely some fingernail biting taking place while awaiting our appraisal,” Silver says. “Anxiety was high, because we knew the bank would only be willing to give us a loan for the home’s appraised value, and we would have to make up the difference.”

When you boil it down, you can:

  • Reduce your asking price to match the appraisal.
  • The buyer can bring the extra money to the table.
  • You can meet somewhere in the middle.

Use your real estate agent to your advantage; they can often negotiate with the buyer to save the contract.

“The most important thing to know is that it’s just an opinion at the end of the day,” Krueger says. “It’s one person’s opinion. Not all appraisals are going to come back the same. I’ve seen wide differences in what two different people would appraise a house at. It’s not the end all, be all. There are options out there.”

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