When Do Home Appraisals Take Place?<\/h2>\n
Home appraisals happen when you least expect them. You\u2019d think that determining the value of your home is one of the first steps in selling it, right? Not exactly…<\/p>\n
Why Home Appraisals Happen at the Last Minute in a Home Sale<\/h3>\n
Professional home appraiser Mike Turner of Turner Real Estate Appraisals<\/a> in Los Angeles explains, \u201cAppraisals are ordered at the 11th hour of a home sale.\u201d In short, before an appraisal is ordered, the buyer has to sign a contract to buy your home for a certain price (determined by a comp), and then (and only then) will a home appraiser come in to verify that price. This is seen as \u201cbuyer protection\u201d and in cases where a bank lender is involved in the sale, a home appraisal is actually required by law. \u201cIn an appraiser\u2019s perfect world [the appraisal] would happen before contract\u2014\u00a0but from a Realtor\u2019s view this would mean ordering \u2018unnecessary appraisals\u2019,\u201d says Turner. \u201cThey\u2019ve been doing this way for 40 years now.\u201d The logic behind this is simple: home appraisals cost money and the listing agent doesn\u2019t want to waste it by doing a bunch of appraisals that don\u2019t result in a sale.<\/p>\n In some cases, especially when a seller isn\u2019t working with a Realtor (also called for-sale-by-owner or FSBO), they might order an appraisal in advance<\/a>. This is helpful in situations where a seller doesn\u2019t have a Realtor to perform a comp, as this will allow them to set an accurate sale price for their home. Something to keep in mind though is that (at least in some case) you\u2019ll need to do another appraisal later on, especially if a lender is involved and requests one.<\/p>\n So what makes the last minute nature of home appraisals so complicated? Sometimes a buyer will have agreed to a price that falls above or below the value assigned by an appraiser. In these situations, it\u2019s back to the drawing table; both parties are informed and offered a chance to adjust the numbers accordingly. \u201cIn the case where the appraised value comes back below purchase price, either the borrower can put down more money, cancel the deal or lower the purchase,\u201d says Turner. \u201cThe buyer is notified and the lender is required by law\u2014 any non-public info the lender acquires must be shared with the buyer so they have a chance to make accurate decisions before closing\u2014 to share a copy of the appraisal with the buyer.\u201d<\/p>\n Now that you know how appraisals work (take a minute, that was a doozy\u2014 we know), it\u2019s time to talk about what really adds value to your home and how you can work with a Realtor to communicate that value to an appraiser.<\/p>\n Here\u2019s where working with an agent really comes in handy. In fact, let\u2019s just be blunt, you\u2019re going to need one<\/a>. You can do some stuff yourself and there\u2019s a lot of information and resources online but if you really want a thorough report, you need an expert to conduct it. A top real estate agent will walk through your home like an appraiser would, run detailed comps, and come up with a pretty accurate list price. Top San Marcos seller\u2019s agent Nicolas Jonville<\/a>, who ranks #1 for homes sold in the area, says, \u201cWe do comps, almost like a mini-appraisal that we share with the appraisers. If a seller does not have an agent they would have to provide useful comparatives, and not just by square footage. We compare by nearby homes we\u2019ve sold, yard, location, and neighborhood info. Appraisers do evaluations quickly, so the more valuable and truthful information we can provide the better chance of getting the value.\u201d<\/p>\n Needless to say, there\u2019s a lot to consider when assessing the value of a home, not the least of which being the renovations and upgrades that a homeowner has invested in during their time in the home. Says Jonville, \u201cWhen we meet with an appraiser we provide a complete list of upgrades, by asking the seller if they can provide a spreadsheet of costs and dates of the upgrades. It\u2019s important for us to be able to bring this to the appraiser, because the appraiser is very numbers-oriented.\u201d An important thing for sellers to note here is that upgrades don\u2019t always mean more value<\/b>. Turner explains that upgrades matter more or matter less depending on where your home is located. If a home is in an metropolitan area for example, he maintains that 80% of that home\u2019s value is based on its location, whereas in a rural setting that 80% in value would be the home itself. \u201cIf you\u2019re talking 80% of the value is in [location], who cares if the stove was replaced last year or not,\u201d says Turner. \u201cIf you\u2019re in\u00a0major metropolitan area, the condition of house is not a big deal. But if you\u2019re in a rural area, like an outlying or less populated area, then this does\u00a0matter.\u201d<\/p>\n Working with an appraiser shouldn\u2019t feel like something you have to study for. The nature of their work is to provide an unbiased report on your home, so there isn\u2019t a whole lot you can do to sway their opinion. But there are a few things you absolutely should do.<\/p>\nWhen Appraisals Happen Early-On<\/h3>\n
How Home Appraisals Can Affect Sales<\/h3>\n
What Adds Appraisal Value To Your Home (And What Doesn\u2019t)<\/h2>\n
First, Understand How Real Estate Agents Help with the Home Appraisal<\/h3>\n
When Upgrades and Home Improvements Matter for Home Appraisals<\/h3>\n
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<\/a>How To Succeed With a Home Appraiser<\/h2>\n
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