As you near the end of your home sale journey, one of the last remaining steps is getting your home appraised. I’ll help you gather the necessary materials and prepare for the appraiser’s visit.
What is an appraisal?
An appraisal is an objective valuation of your property that serves as a safeguard for the buyer and the buyer’s lender. While the buyer pays for an appraisal, the appraiser actually works for the lender. While an appraiser may look at some of the same things as a home inspector, the result is an appraised value of your property rather than a condition report.
How is my house appraised?
Appraisers use as many measurable pieces of data available to provide an accurate value of your property, including:
Comparable properties in your area that are of similar size, age, and condition
The condition of your home’s systems and structure
The square footage of your property
The number of bedrooms and bathrooms
The quality of your flooring, plumbing, and electrical systems
Appraisers include research about other properties and neighborhood values, as well as an in-person visit for their evaluation of your home.
How should I prepare for an appraisal?
Preparing for an appraisal is similar to prepping for an inspection. Consider the following action items:
Provide a list of all major improvements to the home and the age and condition of your roof, heating and air conditioning system, and appliances.
Provide any permits required for home improvements.
Clean your house.
Provide full access to all rooms and spaces, including the garage, sheds, attic, and crawlspace.
Remove or crate your pets.
Leave the house, or at least stay out of the appraiser’s way.
How can an appraisal affect my home sale?
An appraisal could require a renegotiation if the property value comes in lower than the sales price. The appraised value dictates the maximum amount the lender will allow the buyers to borrow, minus their down payment. Depending on how the contract was written, if the appraisal is low, we can:
Ask the buyer to come up with extra cash to make up the difference between the loan amount and the purchase price.
Reduce your price to the appraised value.
Split the difference with the buyer.
Cancel the contract.
Should this happen, we’ll explore all available options in the context of the contract and market conditions.