Friday, June 10, 2022 / by Laura Larson
How the appraisal process works
Usually, the individuals seeking to buy or refinance a home pays the home appraisal fee. Home appraisal costs vary by the type of appraisal, the location of the home, and the type of property that is being appraised. To get started, look for any areas of your home that could be improved.
A certified residential appraiser will be at your home for about 30 to 60 minutes conducting a home inspection. The home appraiser will be taking pictures of all the rooms in your house to provide visuals to lenders and buyers. This is an important factor in the appraisal report and it helps lenders and buyers understand each room’s condition and features. You’ll especially want to focus on areas that can hurt your home appraisal, we have listed 7 of the most common ones below and how to fix them.
1) Poor curb appeal
How to Fix It: Trim up bushes and trees so they are tidy and neat. Add annuals or perennials for a pop of color and interest in what can otherwise be a sea of green grass.
Having a fresh coat of paint applied to the exterior of your home, your front door and shutters painted in a complementary color, and adding flower boxes to match your new landscape will all set the right tone for your home’s appraisal.
Garage doors often comprise a good portion of the front of a house, and updating your garage doors with new ones is almost always a sure bet to increase value.
Don’t forget to stage the front porch with a couple of casual chairs and a colorful throw pillow to match the flowers in the yard.
2) Your home’s interior needs a lot of attention
How to Fix It: The first step toward having a showcase home is to thoroughly declutter and clean every room and closet. Because your goal is to show off your home’s best attributes, be sure to pack away personal items that can be distracting, like family photos and mementos. Hiring a professional organizer or declutterer can make this task a lot less daunting and make the project much quicker and easier.
You may have touched up the exterior paint, but don’t forget that painting the interior is one of the easiest and least expensive improvements you can make. Neutral colors will appeal to more home buyers and those same colors will help brighten any room.
What about your blinds and drapes? Are they dark or dated? You may want to invest in some new curtains that are trendy and colorful to bring a more modern look to your space. Are any of the slats in your blinds broken or dirty? Replace those that are damaged and clean any that need it.
Mirrors add depth and interest to any living space, indoors or out, and they help redirect sunlight throughout your home. To create a sense of space and openness, consider adding a mirror at the end of a hallway, or on a large living room wall.
Does your home have any “hidden” features? Features that might otherwise go unnoticed, such as space above the kitchen and dining room that could be updated for added storage could also add value to your home. Make sure they are accessible and that the appraiser is aware of them.
3) Your kitchen and bathrooms are outdated
How to Fix It: Kitchens and bathrooms are oftentimes what hurts a home appraisal but are also great places where value can be added to a home. In the kitchen, you can freshen things up by refacing cabinets and replacing outdated pulls, light fixtures, and countertops. Swapping out old appliances for energy-efficient appliances and updating your sink and faucet with a more modern one could be just what your kitchen needs. You can even install recessed lighting under the cabinets which are not only functional but gives the kitchen a finished look.
In your bathrooms, cabinets can be updated with paint. If you have a builder’s grade mirror, give it a new look by adding a wooden frame around it. The frame can also be painted to match the cabinets. Install a new faucet and light fixture and include a bright shower curtain to add a splash of color.
4) Your bedrooms and laundry room are dark and small
How to Fix It: Optimize for your home’s square footage. Bedrooms will look cleaner and brighter with clutter removed and a fresh coat of paint. Replace any curtains that are too dark and add a closet organization system to your bedroom closets to make the most of the space available. To open up small bedrooms, you can strategically place an appropriately sized mirror in a corner or forgo a headboard on the bed. Instead, hang two complementary pictures above the bed where the headboard would typically be.
Survey your laundry room. Because these rooms often have smaller square footage than other rooms in the house, walls painted a bright, snow-white help add a sense of openness and airiness. Adding storage bins or shelves if there are none will help reduce the clutter, make the space more organized, and keep laundry detergents and fabric softeners out of sight.
5) Your basement is unfinished
How to Fix It: Too often basements are unfinished spaces used only for storage. To increase the value of your home, store items elsewhere, and turn the basement into usable living space which will add to your home’s total square footage. By adding walls, an acoustic drop tile ceiling, and flooring you’ve got the beginnings of a second living room, children’s play area, exercise area, or even a media room. You can also customize the space to fit your current needs. Adding square footage and livable space to your home is one of the easiest ways for increasing your home’s value.
How to Fix It: Big-ticket items can be costly to update, but they often have a good return on investment. Examples of big-ticket items are replacing the roof, installing a new HVAC system, updating windows with new energy-efficient ones, and installing or replacing exterior siding, which eliminates the need to scrape and paint every few years.
If your home needs to have the electrical system updated, it would be beneficial to make the change before listing the house, since an inspection would likely point out the need for it, and you could delay, or worse, lose a sale as a result.
The same goes for any plumbing issues you may have been experiencing recently. If you’ve noticed a leak, make sure it’s repaired, and that stains are appropriately cleaned and concealed.
7) Your home has no outdoor living space
How to Fix It: Patios and decks create additional gathering spaces for grilling, relaxing, or entertaining. If you have a patio or deck that’s cracked or uneven, consider hiring a professional to replace or repair your outdoor living space.
Value can also be added to your home by installing a deck if you don’t already have one. Maybe your deck is in good shape structurally but doesn’t look as good as it once did. In that case, consider refinishing it using either paint or stain. Both help to extend the life of the wood and look beautiful once the job is done.
You want the home appraisal process to go smoothly and provide the most value for your house. As you can see, making a few improvements here and there can go a long way toward adding value to your home.
Most homeowners won’t be able to fix everything in their house, however, there are ways you can prepare yourself to increase the chances of getting the fair market value that you wanted. Talk with your real estate agent and get their professional opinion. Here are the most basic things to consider while preparing for the home appraisal process.
Clean up messes and clutter
A clean house free of clutter typically makes rooms look spacious and more attractive to home appraisers. A messy house could prevent the home appraiser from having a better view of your home’s features.
Do your research
Brush up on your local knowledge. Research the current local housing market conditions and the sales prices of recently sold homes within your area. Consider your home value compared to the neighborhood or city you’re in, also known as real estate comps. Is the surrounding area seeing rapid growth, stable, or slow?
Prepare proof of upgrades
Compile a “brag sheet” of all home improvements. If you’ve made any upgrades or fixes to your house, like a brand new roof, show the proof to the home appraiser. Have documents on hand that provide detail on all your improvements and sales receipts. Don’t forget all the details including the date of installation and its cost.
Inspect the interior and exterior of the house
Conduct a home inspection yourself. Note all concerns when you walk through the inside and outside of the house. If there are any repairs that need to be made, like fixing broken appliances, do this before the home appraiser visits.
What do appraisers look for and what is in an appraisal report?
Home appraisers usually follow a standardized form, known as the Uniform Residential Appraiser Report, to evaluate the appraisal value. The report has three main factors that the appraiser will report on. Here are some examples and questions the appraiser may consider in your inspection.
Are comparable homes within the area increasing in value?
How stable are current real estate conditions?
Where is the property located?
How is the urban development?
Is your house in a flood zone?
Are the utilities gas or electric?
What is the property’s zoning classification?
How are the home’s water and sewer connected?
How old is the home?
How many rooms are in the house?
Is there storage, a finished basement, or an attic?
Is there a garage?
Why appraisal values are important
Appraisers want to help homebuyers and ensure they’re paying a fair price for a home. They also want to prevent the lender from lending out more money than what the home is worth, which would only increase their investment risk. Real estate agents can also be included in the process by helping you decide which home improvements you can do that will add the most value.
Ultimately, the appraisal report helps a mortgage lender determine how much money to lend homebuyers for their home purchase or if you’re refinancing your home. That’s why it is important to take all the steps you can to get a high appraisal.