Preparing for an Appraisal:
What You Need To Know
Appraisal day! It’s an important one and a significant step towards a successful settlement. Preparing for appraisal is key! Here is what you, as a seller, can to do ensure your home appraises.
Why is The Appraisal Important?
If the buyer of your home is taking out a loan to make the purchase (vs. the infrequent all cash deal), an appraisal contingency will typically be part of the sales contract. You can read more about how the appraisal contingency works right here.
When the appraised value of your home is equal to or above the sales price, the property has “appraised” and this contingency can be removed. If the value is lower than the sales price, the lender will not make the loan as it is currently structured (lenders will only loan up to the appraised value). The contingency stays in place until this issue is resolved,
So to avoid any delays or the voiding of the contract, you’ll want to do your part to make the appraisal go smoothly! Preparing for appraisal will help ensure a successful settlement.
FYI: appraisals are not to be confused with tax assessments! Click here for a more detailed explanation on assessments.
How Does The Process Work?
The buyer’s lender will order the appraisal – so there’s nothing to do here.
While appraisers cannot be requested by name, you can ask they the appraiser have certain certifications (like the American Society of Appraisers).
Before coming to your home, the appraiser will first look at homes similar in style, location, and footage have sold within the past few years (also known as the “comps” or comparables). Certain factors, such as time of year and condition of the sold homes, can have an affect on your appraisal.
The appraiser then will visit your home to examine its condition, quality and anything else that may affect its value like location.
Preparing for Appraisal
Before the appraiser comes to visit, have your house in “show ready” condition for the appraisal. No dust bunnies or clutter! Your home should shine and smell good (yes, put away the litter box). You want the appraiser to have the best first impression possible of your home. While having it a little messy won’t necessarily bring the value down, having it looks its best can help! This advice goes for your yard too. Maintain that good appeal you worked on when listing your home.
If you have a list of your home’s major improvements, feel free to leave those out for the appraiser to review. Similarly, if you have any permits you’ve secured for larger projects those can be left as well. As your agents, we will also send any comparable properties and relevant information to the appraiser.
For the appraisal appointment, the house should be clear of the kids, pets and yes – even you! Most appraisers prefer to have the house to themselves so they can focus on the details. If for some reason you MUST be home, be sure to stay out of the appraiser’s way and give him or her room to do their work.
The Appraisal Report
Since the buyer orders and pays for the appraisal, the seller usually doesn’t see a copy of the appraisal report unless the appraisal comes in low and there is an issue. Otherwise, it’s good news that the home appraised and we continue on to closing!
The Bottom Line
Having your home appraise as needed is an important hurdle to pass on the way to settlement. If you have any questions about the process or just want to talk it through, please reach out. We are always happy to help!
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