There are two major steps in the process of selling your home that can give the most headaches to homeowners: the home inspection and appraisal. Both can have a major impact on the home’s market value and how much money you can earn in the sale. While both can break the sale, you can always fix things on your home inspection, but the appraised value is not something easily negotiated.
What to do?
First, have a clear realistic picture of what your home is worth. An experienced trusted Realtor from Birmingham, Alabama can help determine the current value of your home compared to other similar sized homes with similar amenities and condition. A low appraisal surprise will most certainly cost you not only money but valuable time in the sales process. Second, understand what an appraiser looks for and what you can do to enhance and communicate your home’s maximum value. Again, an experienced trusted Realtor from Birmingham, Alabama can help maneuver the processes of selling your home including appraisals.
What is the Appraiser’s Role?
For the most part, an appraiser’s role and their approaches towards valuation are often misunderstood by consumers. Sellers sometimes mistrust the process and believe it can be influenced by the buyer or their lender, especially if the appraisal comes in short. After all, it is paid for by the buyer, right? Yes, while the buyer does pay for the appraisal, the buyer will never meet the appraiser and the point of contact for entry into the home is with the listing agent.
If a purchaser is financing the purchase, the appraisal is required by the lender and their investors, to make sure their loan on the asset is viable. Even though it is for the lender, the lender cannot be in contact with the appraiser except through a third-party appraisal management company who in turn chooses each appraiser on a round robin basis. This ensures that there is no outside influence on the valuation. Federal guidelines mandate this process.
What Influences an Appraisal?
For the most part, an appraiser’s role and their approaches towards valuation are often misunderstood by consumers. Sellers sometimes mistrust the process and believe it can be influenced by the buyer or their lender, especially if the appraisal comes in short. After all, it is paid for by the buyer, right? Yes, while the buyer does pay for the appraisal, the buyer will never meet the appraiser and the point of contact for entry into the home is with only the seller’s agent. The appraisal is for the lender and required by their investors, to make sure their loan on the asset is viable. Even though it is for the lender, the lender cannot be in contact with the appraiser except through a third-party appraisal management company who in turn chooses each appraiser on a round robin basis, so that there is no outside influence on the valuation. It’s all mandated by federal guidelines.
Appraisers take a multi-pronged approach to determining the value of a home. Much of which, the homeowner has no control over such as the local housing market trends or forces that change supply and demand. Residential appraisers are held to a very strict set of guidelines and depending on the loan product, FHA, VA or conventional loans, the guidelines vary. An experienced trusted real estate agent who specializes in listings understands these guidelines and how it can impact a sale. They will know how each appraisal type is approached to guide the home seller or buyer through the pitfalls of each, such as what repairs need to be made in advance and what information they can bring to light for the appraiser to consider so that all value is understood and factored in. The appraiser will use all of these factors when he or she studies your neighborhood, your home, and competitive properties to arrive at the home’s appraised value.
There’s Value in a Well-Maintained, Clean Home
If you have maintained your home over the years, your home inspection will be a much easier step in the process, and a well-maintained home will also impress the appraiser. Making small repairs, revving up a home’s curb appeal and meticulously cleaning the home will help you in both instances when selling your home. While some appraisers say that clean properties do not result in a higher home value, many real estate industry insiders, beg to differ. The condition of a home will have a direct bearing on its appraised value –the Condition and Quality rating in the appraisal industry. The condition rating ranges from C1, for new homes, to C6, for homes with severe maintenance issues or defects that may impact the home’s habitability. The appraiser will consider the improvements you have made to the property during this phase of the evaluation.
Supply the Appraiser with Accurate Data
You might have done a lot of work upgrading your home, but do not assume that the appraiser will notice. Be sure to make a list of these upgrades with the dates they were performed and by whom. Make sure to save these receipts as you make these improvements to keep this data as accurate as possible, suggests Forbes.com. Make sure you also give specifics of what exactly you upgraded, for example: if you upgrade your kitchen do not just write “kitchen remodel” specify everything that was upgraded including the materials and brand of the appliances.
It is also important to remember that the appraiser may not be familiar with your neighborhood. Your neighborhood is factored in heavily to an FHA appraisal for instance. Your real estate agent with your help can make a neighborhood description part of the data that is supplied to the appraiser. A bulleted list will make it easier for the appraiser to read quickly. Tell the appraiser about the neighborhood, your HOA (and fees you pay), important points about the location within the town or city, and information you have on pending projects that will have a positive impact on your home values.
If you are in a great school district, this is an important point to add to your neighborhood description because it can have a positive impact on the value of your neighborhood. If you are searching Birmingham, Alabama-based real estate agents, you can connect with the experts from Christina James Team. The traits like local market knowledge, hard work, and integrity make us one of the best realtors in Birmingham, Alabama.
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