Whether you’re selling your home or refinancing your mortgage loan, your final home appraisal is the key to determining what your house is worth.
As a result, maximizing your home appraisal value can mean more profits on a sale or more savings during a refinance. Find out what factors go into your home appraisal and how to boost the value of your property so you can get the highest appraisal possible.
How home appraisals work
A home appraisal is an assessment of the fair market value of your home and surrounding property. Factors that go into home appraisals include the following:
- Previous sale prices
- Fair market value of comparable homes in your area
An appraisal usually is required when you sell your home or refinance your mortgage because the value of your home might have increased or decreased since it was last valued.
And if you’ve made upgrades or the condition of the home has worsened, the buyer or lender will want those details to factor into the current value.
It’s important to note that you don’t need to learn how to appraise your home yourself. You can hire a professional appraiser who doesn’t have any financial interest in the sale or refinancing process.
According to HomeAdvisor, an appraisal by a professional costs $327 on average. However, it can range from $225 to $450, depending on where you live.
The physical examination of your house takes a few hours or less. But it can take up to seven days total to gather data on comparable homes and file the report with the lender.
How to increase your home appraisal value
Since the appraisal is meant to be an objective valuation of your home, it’s unlikely that you’ll be able to boost the value of your appraisal with charm alone. Instead, here are some things you can do.
1. Fix minor issues
Appraisers are trained to notice even the smallest problems or blemishes. Fixing or polishing things like chipped paint, holes in walls, and wood finishes might not make a huge difference, but it can help.
“The chances of you spending a small amount of money to have your home appraise at a higher value is not the most realistic goal,” said agent Tyler Whitman of Triplemint, a real estate brokerage. “That said, if you have holes in the wall or some sort of blemish that has an easy fix, do the easy fix.”
2. Tackle a couple of major projects
If you notice that some areas of the home need an update and you can afford home improvements, take the time to do it.
“Kitchens and bathrooms tend to get the most notice,” Whitman said.
There’s no need to do a full renovation, however. For example, Whitman recommended doing a simple sanding, polishing, and refinishing of the floors rather than replacing them altogether.
“Work like this, while intensive, will certainly increase the value of your home,” he added.
3. Bolster your curb appeal
The first thing the appraiser will notice when they visit is the outside of the home, including the yard. Even if the inside of the house looks great, a bad first impression can cost you.
There’s no need to invest in over-the-top landscaping. But keeping your front yard and backyard neat, adding flowers, and making minor repairs to the driveway or porch can go a long way toward making a good first impression.
4. Collect comps
“Comps” is a term real estate experts use to describe comparable homes in your neighborhood. They give the appraiser an idea of the value of similar homes in your area.
But if the appraiser isn’t familiar with your area, they might miss one that could show a favorable value.
“I always send the appraiser the comps I used when pricing the home to make sure the value comes in where we all hoped it would,” said Whitman. He admitted the appraiser won’t necessarily use these comps in their final evaluation, but, of course, it doesn’t hurt to try.
5. Point out major home improvements
If you’ve done a lot of work renovating your home, don’t let it go unnoticed. Whitman shared his frustration about the fact that some appraisers in New York City don’t notice major improvements on their own.
“The appraiser will often compare it to the same unit that just sold upstairs for less money but not notice that this home has a brand-new kitchen and bathrooms,” he explained.
Prepare early for your home appraisal
Don’t put off preparing for your home appraisal until the last minute.
Start making improvements early so you can address issues or mistakes that come up during the process. Do what you can to spruce things up, but don’t sink so much money into the improvements that you won’t recoup the costs.
If you prepare early and properly, you’ll have a better chance to score a high appraisal value, which can help you meet your home sale or refinancing goals.
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