Appease the Appraiser & Find Your Home’s True Value

Appraisal process

Getting an appraisal — a report that states the actual market value of a property — is among the first steps to refinancing your home or preparing to put it on the market. An appraiser will analyze not just your home, but those around it, as well as the location and features of the neighborhood: proximity to restaurants, shops, grocery stores, highways, parks, schools and other important amenities.

Changes to the appraisal system

For buyers and sellers, scheduling appraisals recently has become more challenging with changes in national regulations governing appraiser fees and apprenticeships. The new rules have created a shortage in many markets, delaying and even derailing transactions.

Delays can cause a borrower’s loan lock to expire while they wait for their desired home to be evaluated, often causing a chain reaction and setting back the seller’s purchase, as well. Overburdened appraisers may charge exorbitant rush fees to move appointments up. And when appraisers can’t be found locally, they come in from other cities or states, leaving the appraisal in the hands of someone unfamiliar with the area.

The solution for both parties is scheduling enough time for the sale to accommodate a delayed appraisal. Parties on either side of a sale should talk with their real estate agents to get a sense of how long it will take to get a local appraiser. Buyers also should address the issue with their lenders to try to avoid losing rate locks or paying to extend them if the appraisal takes longer than expected.

Extra steps for sellers

While an appraisal is an objective analysis of your property (square footage, materials used, type of house, number of rooms, garage or no garage, etc.), it doesn’t hurt to spruce up. Declutter, repaint dingy walls, clean up dead or unruly landscaping, replace damaged flooring and ensure all appliances work properly. These items already should be on every homeowner’s presale to-do list.

Major upgrades don’t guarantee an increase in value — or even a total return on materials — so there’s no need to overdo it. If you renovate, concentrate on the kitchen and bathrooms. But money is better spent on smaller projects: landscaping updates, drawer pulls, paint, doorknobs, light fixtures or even a new front door. Things like a new roof, windows or furnace should be pointed out to the appraiser. Whatever project you take on, finish before the appraisal and save your receipts.

Know your neighbors — and the appraiser

An appraisal is based largely on the homes and amenities surrounding the property in question. Appraisers evaluate comparable listings and measurable qualities of the home to determine market value, which doesn’t always align with what buyers are willing to pay.

To prepare for the appraisal’s likely outcome, do your research. Tour other listings in the area and pay attention to what they sell for. Appraisers may not be as in tune with the area as the people who live there and could overlook key features. Mention how your neighborhood has improved or if new amenities have been added.

Know your appraiser’s qualifications and expectations, too. They must be licensed by the state, but check for additional distinctions, such as MAI or SRA. Before scheduling the appraisal, review the forms the appraiser will use to evaluate your home. They will give you an idea of how your home will be analyzed, giving you a thorough checklist to prepare.

Trust your Realtor

An appraisal that comes in far lower or higher than expected has consequences for buyers and sellers. Review appraisal discrepancies with your agent and create a strategy to improve the value of your home and price it appropriately (for sellers) or adjust your loan amount (for buyers).

Terrie Cox, RE/MAX’s top broker in the Pacific Northwest, is skilled at helping her clients prepare for and understand the appraisal process. She works with clients on either side of a real estate transaction and homeowners planning to refinance their homes. Call or text her directly at (360) 607-4100 or email to schedule a consultation.

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