Preparing for The Appraisal – Selling or Refinancing

Make a good first impression, it helps.

Make a good first impression, it helps.

 

 

 

 

 

This post is written primarily for the benefit of the seller and the listing agent as well as the refinance applicant.

  • For most homeowners, the real estate appraisal is a key component to selling a home. It allows the business transaction to occur between the seller and buyer, as well as the Realtor or real estate agent and the mortgage lender.
  • A state licensed appraiser is responsible for preparing the appraisal for a mortgage loan. The appraiser works for or is contracted by an Appraisal Management Company (AMC) which must also be state licensed.
  • To facilitate the appraisal process, it’s beneficial to have the following documents, as applicable and if available, ready for the appraiser:
    • Prepare a list major home improvements (for example, the addition of central air conditioning or updated kitchen) and upgrades including the date and cost of installation as well as permit confirmation where permitting is required by the local government.
    • List any recent property maintenance items such as roof repair/replacement, a new hot water heater, new paint, carpeting, etc. As well as obtain and provide permit documentation when and where a permit is required.
    • Have a copy of a survey or Improvement Location Certificate of the house and land. Again if applicable and readily available. Such may only be required on rural properties.
    • Provide any written property agreements, such as a maintenance agreement for a shared driveway or a common wall agreement(s), etc.
    • List personal property which is to be sold with the home.
    • Provide a copy of the Purchase Agreement on a pending sale.
    • Your Realtor should offer to provide a Comparable Market Analysis (CMA) so you may provide the appraiser with comparable properties and values. Most appraisers value this help. Offer the CMA, do not try to force it on the appraiser.
    • There is nothing in law prohibiting you or your Realtor from presenting a CMA for the appraiser.
  • Once the appraiser arrives at the property, there is no need to accompany s/he on the entire site inspection; it is appropriate to be available to answer questions. Feel free to point out any home improvements and provide the supporting documentation of the cost.
  • On pets, not everyone loves our furry family members as we do.
    • Four-legged friends should be unobtrusive and well-mannered. Dog bites are to be avoided.
    • Feline friends should have recently cleaned litter boxes as well as neatened dining areas.
    • Spray the carpets, bed coverings and cloth furniture with Fabreze an hour before the appraiser arrives.

Other Considerations

  • Accessibility: Make sure that all areas of the home are accessible. Especially make sure access to the attic and crawl space are readily entered. With a locked room, you’ll wish to be certain to provide access for the appraiser so as not to create doubt. Doubt is not helpful for an appraisal.
  • Housekeeping: Appraisers see scores of homes a year and will look past most clutter, but they’re human beings too! A good impression can translate into a higher home value. Make up the beds; clean up the kitchen, etc. We found this article to be most helpful in preparing for showings as well as the appraisal. 24 THINGS YOU CAN DO IN 10 MINUTES OR LESS TO MAKE YOUR HOUSE MORE SALEABLE
  • Pre-Appraisal/PreListing Infographic
  • FHA Financing Eligibility: In the event you wish to have your property eligible for FHA financing, you may wish to: Install smoke detectors on all levels (especially near bedrooms); install handrails on all stairways; remove peeling paint and repaint the affected area.
  • Maintenance: Repair minor things like leaky faucets, missing door handles and trim.
  • Regulations: Some states, Colorado among them, require that carbon monoxide detectors are installed as a matter of law.
  • Sensitivity: Remove sensitive pictures or religious symbols that could prevent an appraiser from taking the required photographs for the report due to privacy concerns.

“Having your house clean does make a difference, even though in theory it should not,” says Mark Ferguson, a real estate professional and property investor in Greeley, Colo. “Appraisers are people, and they are swayed by smells and how a house feels, even if they aren’t conscious of it.” For the complete article, read Do Ultra-Clean Homes Appraise Higher?

Image attribution

Financially Speaking™  James SprayMLO, CNE, FICO Pro
CO LMO 100008715 | NMLS 257365 | October 11, 2014

Notice: The information on this blog is opinion and information. While I have made every effort to link accurate and complete information, I cannot guarantee it is correct. Please seek legal assistance to make certain your legal interpretation and decisions are correct. This information is not legal advice and is for guidance only. You may use this information in whole and not in part providing you give full attribution to James Spray.

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