So, you’ve finally found the perfect house and agreed on a sale price with the seller. But before you can close the deal, there’s one crucial step left: the home appraisal. Understanding what home appraisers look for in determining a house’s value is key to a successful home buying process.
Why are home appraisals necessary?
Home appraisals are essential to provide an unbiased market value of the property. Lenders require an appraisal as part of the loan process to ensure that the agreed-upon sale price is reasonable. If the appraised value is higher than the sale price, it means you’re getting a good deal with more equity. However, if the appraisal comes in lower, it can complicate the buying process.
What do appraisers assess inside the house?
Appraisers thoroughly evaluate the interior of the property, looking for design, condition, safety issues, and signs of deferred maintenance. They also consider outdated features that may affect the home’s value. Improvements like insulated windows and central A/C can positively impact the appraisal.
“Condition is crucial in determining value. Homes with deferred maintenance often sell below their predicted value. Cosmetic upgrades are overestimated, while visible maintenance issues reduce value.” – Jeffrey Batista, founder of Resideline
Do appraisers inspect closets?
Yes, appraisers check closets to determine total square footage. Ensuring all areas of the house are clean and clutter-free helps the appraiser accurately assess the property.
What do appraisers look for outside the house?
Outside, appraisers focus on the roof, foundation, chimney, porch, deck, siding, garage, lot size, and location. Any visible defects or damage can impact the appraisal value.
Other factors appraisers consider in valuing a home
Appraisers assess various factors like market trends, comparable sales, property location, condition, and amenities to determine a home’s value accurately.
What appraisers don’t consider
Appraisers don’t factor in personal décor choices or signs of occupancy. However, they do take note of deferred maintenance issues that affect the property’s value.
Preparing for the appraisal: a checklist
- List home improvements and provide comps to the appraiser.
- Ensure all areas of the house are accessible.
- Deep clean and declutter inside and outside.
- Make minor repairs to improve the property’s condition.
Dealing with a low appraisal
If the appraisal comes in lower than the sale price, options include covering the difference in cash, renegotiating with the seller, or challenging the appraisal. Having an appraisal contingency clause can protect buyers in such situations.
Key points to remember
Understanding the appraisal process and preparing your home accordingly can lead to a successful sale. In case of challenges, your real estate agent can provide guidance to navigate through the process smoothly.