Never in my decades of practicing residential real estate have I witnessed home values being 100% determined by appraisers!  As a consumer you may not fully understand this topic, however as a Seller or a Buyer it will impact how your transaction turns out.

About two years ago, the Feds created an “arms-length” third party entity where appraisers now are parked.  When a mortgage is being applied for, the lender contacts that entity to arrange for the appraiser.  An appraiser is selected from all the large pool of appraisers in that entity to do the job.  The appraiser selected may have no idea about the local market conditions of the property being appraised.  They often times will live or work 50+ miles from the location of the residence.  So, the question is, “How can they possibly do an appropriate report since they have no experience in the local market conditions?”  Often times they don’t, much to the dismay of the Seller/Buyer and Realtor.

The outcome you want from the Top-7 actions required for your home to properly appraise is to keep the look, feel and condition of the home as updated and cared for as possible.  So, here goes – the Top-7 actions before you schedule the appraiser to arrive at your home:

#1  Clean up your home: I am not talking about making sure are the dishes are washed.  What needs the focus is the first impression “curb appeal” stuff.  Making sure the carpets are cleaned.  Touch-up painting on the walls and trim.  These all will affect the value given to your home by an appraiser.

#2  Curb Appeal: Remember, the appraiser will be taking lots of photos of the outside and inside of your home.  Spend an hour or so mowing the lawn, getting rid of weeds, and trimming bushes.  Think about what pictures you want in the hands of loan processors who will be evaluating the appraisal and making the final decision of your home’s value.

#3  Updating you have done: Prepare a list of all the things you have done to your home within the past 15 years.  Include the date and the approximate cost of the updates.  Without this list the appraiser may miss the fact that you have a new roof, new sinks, new sprinkler system, and even additional insulation.  The appraiser will assign and “effective age” to your home and you want this number to be LOW.  This list of updates will help with that number.

#4  A comparable market analysis report: Make sure your Realtor prepares a comparable sales report of similar homes to yours that is given to the appraiser when they arrive.  This means similar homes within a mile or less of your home, with similar amenities and square footage that have closed escrow in the past 90 days.  You may think that the appraiser will already have done this work, however, they will appreciate being provided this report – promise.

#5  Peeling or chipped paint: There are some lenders that will require for peeling paint to be repaired before they will fund the loan.  So, if there are items that need painting or repair, just do them and you will be fine.  The most cost effective items are painting, carpets, lights and plumbing fixtures.  The $500 rule applies.  If a repair item cost $500 or less, get it done before the appraiser arrives!

#6  Location, Location, Location:An appraiser may have no idea what a prime location your home is in.  Let them know how your home is walking distance to Trader Joe’s and the Ironhorse Trail.  Let them know where the schools and community parks are compared to your home.  What about historic landmarks that are close by.  Are you getting the idea?

#7  Lock up your pets: Understand that when the appraiser comes to your home they want to do their work without any distractions.  Not everyone loves dogs and cats.  You want the appraiser to be as comfortable as possible – even with room temperatures.  Put the heat on if it is cold and the air on if it is warm.

So, there may be some work to do before you schedule an appraiser to arrive at your home.  And, if you would like a FREE price opinion of your home, I would be glad to provide it to you.  Until next time…Tim Lampe