Preparing for an Appraisal: What Homeowners Should Know

When selling your home, refinancing your mortgage, or applying for a home equity loan, one critical step in the process is the home appraisal. An appraisal helps determine the fair market value of your property, ensuring that the lender is not financing more than the property is worth. As a homeowner, there are several things you can do to prepare for an appraisal and help ensure that your home is assessed accurately. Let’s explore what you should know and how you can get ready.

1. Understand the Role of the Appraisal

An appraisal is an unbiased, professional evaluation of your home’s value, typically conducted by a licensed appraiser. Lenders use this value to determine how much they’re willing to loan for a mortgage, refinance, or home equity loan. The appraisal considers several factors, including:

• The size, layout, and condition of the home.
• Comparable home sales in your neighborhood (often called “comps”).
• The current market conditions.
• Any improvements or upgrades made to the property.

It’s important to understand that while an appraisal affects how much you can borrow, it’s different from a home inspection, which focuses on the structural integrity and systems of the house.

2. Spruce Up Your Home’s Exterior (Curb Appeal)

First impressions matter, and the appraiser’s evaluation starts the moment they arrive at your home. Enhancing your curb appeal can help set a positive tone:

• Landscaping: Mow the lawn, trim shrubs, clean up any clutter, and make sure your landscaping looks neat and tidy.
• Exterior Repairs: Repair any obvious exterior issues such as cracked windows, peeling paint, or damaged siding. These small fixes can improve the overall impression of your home’s condition.
• Touch Up the Front Door: A fresh coat of paint on your front door or some simple décor can enhance the appearance of your home before the appraiser walks inside.

3. Tidy Up and Declutter

While the appraiser focuses on the structure and value of the home, a clean and well-organized interior can help the process go more smoothly:

• Deep Clean: Ensure your home is clean and free of clutter. A tidy home makes it easier for the appraiser to see all aspects of the property without distractions.
• Declutter: Clear away unnecessary items from countertops, shelves, and floors to help the appraiser see the full potential of your living spaces.

Though cleanliness doesn’t directly affect the appraisal value, a well-maintained home can leave a positive impression on the appraiser.

4. Highlight Recent Upgrades and Improvements

If you’ve made any upgrades or renovations to your home, make sure the appraiser is aware of them. Improvements can add value to your home, so it’s important to document them:

• Create a List: Prepare a list of all significant upgrades and improvements, such as a remodeled kitchen or bathroom, new windows, a new roof, or energy-efficient appliances. Include the cost and date of each project.
• Provide Documentation: If possible, provide receipts, permits, or contractor documentation to back up your claims. This shows the appraiser that the improvements are legitimate and may justify a higher valuation.

5. Make Small Repairs

Before the appraisal, it’s a good idea to take care of any small repairs that could negatively impact the value:

• Fix Leaky Faucets: A small leak might seem insignificant, but it can leave the impression of poor maintenance.
• Patch Holes or Cracks: Repairing minor holes in walls or cracks in the ceiling can make a room look more polished.
• Check for Functional Issues: Ensure that all systems and appliances are working properly. For instance, check that doors open and close smoothly, lights work, and there are no visible signs of damage to flooring, walls, or ceilings.

These small repairs can go a long way in showing that your home is well cared for and in good condition.

6. Provide Access to Every Area

Make sure the appraiser has easy access to all areas of your home, including attics, basements, and crawl spaces. The appraiser will need to examine the entire property to get a complete picture of its condition and value:

• Unlock Rooms: Ensure all rooms, including garages and storage areas, are unlocked and accessible.
• Keep Pets Contained: If you have pets, make arrangements to keep them out of the way during the appraisal. This will help the appraiser move freely around the home.

7. Research Comparable Properties

It’s helpful to know what similar homes in your area have sold for recently. While appraisers use professional resources to determine comparable home sales (comps), having this information yourself can give you a sense of what to expect:

• Check Online Listings: Look at homes in your neighborhood that are similar in size, condition, and features to yours and see what they sold for. This can give you an idea of the potential value of your home.
• Be Aware of Market Trends: If the market has been hot in your area, recent home sales might have gone above the asking price. Be sure to share any relevant information with the appraiser if it could impact your home’s value.

The Bottom Line

Preparing for an appraisal doesn’t have to be stressful. By making sure your home is clean, well-maintained, and easy for the appraiser to evaluate, you’ll increase the chances of receiving a fair and accurate value. Whether you’re refinancing, selling, or applying for a home equity loan, a little preparation can go a long way. If you need more guidance on preparing for an appraisal, reach out to your Loan Officer at Mortgage Investors Group today!