Banks must obtain an independent appraisal when a house is being refinanced or sold to guarantee that they are lending against the property’s actual value. Additionally, local governments appraise properties regularly to calculate their associated taxes.
Appraising any given property is of utmost importance as a seller because it provides you with an accurate assessment of your home’s worth. Considering how this evaluation could affect your sales price and taxes, you must take the necessary steps if the home price comes in higher or lower than anticipated.
Selling your house to a cash buyer is simple, eliminating the need for an appraisal. This frequently happens in times of high demand and low supply in the housing market.
As a seller, it’s essential to understand the ins and outs of appraisals – especially if you need to question them. This knowledge can be hugely beneficial in helping make sure you protect your interests, make an accurate listing price, and attract potential buyers.
Should I Get an Appraisal Before Selling My House
You should get your home appraised to determine the property’s value if you:
- are selling
- are refinancing
- have renovated
A professional appraisal is an impartial, educated estimation of the value of your home, but it’s not a home inspection. To ensure its accuracy and fairness, it will need to be done by a qualified expert with the proper credentials in your state.
In some instances, getting a pre-listing appraisal can be an invaluable tool in aiding sellers in coming up with the best pricing strategy. It may be more challenging for homes with distinctive characteristics to gauge the market’s reaction because you won’t find any recent sales of comparable properties to use as a benchmark.
While it isn’t essential to get a pre-listing appraisal before selling your home, having one may provide peace of mind knowing that even if the buyer’s lender orders an independent appraisal, it is likely to be in line with what you expected.
Selling a jointly owned home
Appraising the real estate value is essential in probate if you’ve inherited a property with other heirs. With this appraisal, both parties can decide whether they should buy out each other’s shares or sell them off instead. The review will give everyone involved a better idea of affordability and ensure that no one feels taken advantage of during the transaction.
An appraisal isn’t only necessary in the event of an inheritance. It may also require one if you’re involved in a divorce or co-owning a property. There must be precise records of the home’s value so all parties can receive equitable compensation for their share.
If you’re looking to refinance, your lender will need an updated appraisal of the property to ascertain its current value to calculate both your equity and eligibility. Your equity comes from subtracting unpaid liens or remaining mortgages from the home’s market value. This figure then contributes towards several factors essential for a successful refinancing – insurance requirements, interest rates, if you can qualify for cash-out refinance, and more.
Knowing your property’s post-renovation value is invaluable if you’ve invested in significant home upgrades, such as a kitchen or bathroom remodel. An appraisal allows you to assess your project’s worth accurately. If you’re planning to renovate your home shortly, an appraisal may determine what improvements will give you the greatest return.
The Process of Getting an Appraisal
If you’re in the market to hire a residential appraiser, ensure they have the necessary certifications and qualifications.
To help you out with this process, here are some tips on finding a reliable and experienced licensed residential appraiser:
- Ask around: To find a reliable home appraiser, contact your network and inquire. You’ll probably hear the most credible referrals from people who have had their homes recently evaluated or real estate agents who are well-versed in the area around your desired residence.
- Do research: For a quick and simple search to find a licensed appraiser in your area, consult the Appraisal Institute. This global organization promotes high professional standards among home appraisers. Their Find an Appraiser tool lets you quickly locate professionals nearby by searching with your ZIP code.
You’ve found an appraiser; you’ll need to prepare for the visit. Appraisers are knowledgeable enough to look beyond a messy home and its contents. So, there’s no need to worry if your house is far from perfect. However, investing time and effort into it can truly help boost your house’s appraised value.
Devote just a couple of weekends to increasing the value of your home, and you can see remarkable results with the following items:
- Curb appeal: Although it is difficult to assign a monetary value to curb appeal, appraisers consider this aspect when forming an opinion of worth. You can improve curb appeal by tidying your yard and attending to landscaping.
- Make minor repairs: On the Uniform Residential Appraisal Report, there is a section that allows appraisers to note any repairs, renovations, or remodeling needed for a property. Even if you don’t plan on making drastic improvements, addressing potential safety hazards such as faulty plumbing, electrical issues, and busted flooring is necessary. Not only will this help ensure the well-being of those living in or visiting the home, but it also adds value to the property itself.
- Targeted upgrades: If you intend to put your property up for sale later on, consider making improvements that will significantly boost its appraisal value. For instance, consider replacing your boiler or furnace in colder climates.
House Appraisal Documentation
You’ve upgraded your home, remedied any damages, and contacted the appraiser for an assessment.
The next step is to gather essential documents that can assist the appraiser in determining your property’s worth. Make sure you have records of any remodels, upgrades, and new additions done over the past years easily accessible; this will allow for an accurate appraisal process.
Things You Need to Know About a House Appraisal
Although you rarely have direct contact with them, appraisers can be instrumental in deciding whether or not your house sells. What they assess is paramount, and it could mean all the difference when selling a home. Ultimately, their findings are essential to help close that deal.
Here are four essential things to know about the home appraisal process.
Appraisals are usually quick
Appraisers usually have a tight schedule and spend only about 20 minutes at the actual home. The rest of their work happens back at the office.
With a keen eye for detail, the appraiser carefully inspects the house to ensure accuracy. Factors such as the size of the property, number of bedrooms and bathrooms, total square footage in the living area, and upgrades/defects made to the building are all confirmed during this process. Thanks to their expertise and swiftness in on-site assessments, every item is quickly checked off their list with precision.
While your home’s appraisal depends on the square footage, number of rooms, and amount of land, a cluttered house can make an impression as well. After all, appraisers are human too. Keeping your living space tidy is likely to enhance its worth in their eyes.
The local real estate market is important
An appraisal isn’t just about determining a set value for a home. Instead, it’s an evaluation of the house versus similar properties sold in the vicinity that highlights its present market worth. As such, appraisers require up-to-date insight into local real estate trends to assess fair market value accurately.
To ascertain an accurate value for the property, the appraiser will get a comparative market analysis (CMA) from realtor databases such as MLS (Multiple Listing Services) and other public records. They look up sold homes that are most similar in terms of location, size, age, and condition to your home.
You can challenge the results
If, as the seller, you find that an appraisal is lower than it should be, protest it. Reach out to the lender and learn their process for dealing with such disputes. Of course, ensure that you have supporting documentation ready to make a solid case supporting your argument.
Ensure that you take photos and keep track of all improvements made, in addition to similar homes in your local real estate market.
Nonetheless, only a mortgage lender can mandate a second appraisal. Suppose the lender rejects your request for reconsideration. In that case, you can pay out-of-pocket for your own appraisal.
Why You Might Not Be Happy About Your House Appraisal
Although understanding the terminology can be confusing, it’s crucial to recognize that your home appraisal and market value are only sometimes synonymous.
The market value of a property is subject to fluctuation based on how desirable it appears and the level of competition in its area. Ultimately, what someone pays will be determined by emotional investment.
When more than one individual is bidding on the same property, prices tend to inflate due partly to bidders getting emotionally involved. In such cases, buyers may pay a price far exceeding appraised value just for owning it – regardless of cost.
On the other hand, appraisals rely on evaluating changes made to the structure of a property and its history. Appraisers use comparable sales (or “comps”) for reference, yet both values are likely similar in most cases. If you’re looking to sell your home, it is wise to be chiefly concerned with market value instead of appraisal value.
If you’re looking to get the most from your property, getting an appraisal before listing it may not be the best decision. The appraised value could be lower than your potential asking price, putting a dent in your profits.
Challenging Your House Appraisal
County appraisals are the foundation for determining property taxes based on a home’s current worth. If you’re not looking to move in the upcoming years and your assessment appears too low, take solace in knowing that your tax bill will also be lower.
You can contact the county auditor if you’re selling your home soon and received a low appraisal. Most counties are open to your appeal if you provide evidence of any upgrades or remodeling that you’ve done that affects your home’s valuation.
If you’ve researched the surrounding area and found comps that don’t align with the appraiser’s findings, requesting a reexamination is definitely worth your time.
Even if there are few recent sales in the region, providing factual evidence to back up your research can sway their opinion on what comparable homes exist elsewhere. You might see a change in their initial evaluation by presenting hard facts to the appraiser.
Remember the other person’s emotions when presenting your disagreement with an appraisal, and keep conversations professional. Respectfully challenge the assessment to ensure you can find a satisfactory solution for both parties.
When you’re trying to determine if an appraisal is worth it, there are several things to consider – such as the uniqueness and special features of the property, whether or not there are enough sales comps available in your area, any uncertainty with an inherited estate, and other factors.
If you want a professional opinion on what your house may be worth or believe that pricing could be complex due to unique circumstances, then investing in an appraisal is likely worthwhile.
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