Homeowners spend years cultivating a home full of memories and not to mention how much they spend on maintenance and upgrades over the years. When a homeowner decides to put their home on the market, of course they are going to want to list it at a price they think it's worth.
Even if the homeowner lists their home at a price they think the home is worth, a home appraisal could throw a wrench into the works. Not only are appraisals often required by the lender, 43% of contracts have appraisal contingencies. Should an appraisal come back saying the house is worth less than asking, the whole deal could be delayed or terminated entirely.
So, to avoid this from happening, it may be in your best interest to get a home appraisal before listing your home to eliminate a potential setback.
Here are a few things you can expect when you're getting a home appraisal done on your home - especially if you want to sell your house as-is.
How is an appraisal different from an inspection?
A home inspection typically happens before the appraisal and it looks at the condition of the home. They'll inspect the roof, electrical and plumbing systems, the HVAC and the exterior for any hazards.
A home appraisal will only look at your home to find the fair market value, meaning they'll look at the price your home would sell for during a normal market.
What do home appraisers look for?
The appraiser will only look at the overall condition of the home. They'll factor in the age of the home, square footage, number of bedrooms and bathrooms. THey'll also factor in the lot size, any upgrades you have made, the location of the property and even the view.
What happens if the house appraised lower than I'm asking?
If you do get a lower appraisal, you do have a few options. You could negotiate with the buyer to cover the down payment and closing costs if they cannot pay the difference between what you're asking and what they've been approved for. If this doesn't work, you may have to lower your asking price.
You could also get a second appraisal which could result in a different appraisal value. Do keep in mind that if you're going for a second appraisal, you'll have to pay for it and it could also make the buyer find a new lender.
Things you can do to have a good appraisal
Before the home appraiser comes, there are a bunch of things you can do to increase the likelihood of getting a good appraisal. This things include:
Thoroughly cleaning your home to remove any dust, scuff marks, debris, and other things that would detract from the special features of your home, such as a lovely bay window with a view, a fireplace with beautiful stone work, or even crown molding.
Fresh paint and making repairs, such as broken windows, creaky floors, or large holes in the walls will show the appraiser that you take good care of the home, which will factor into the value.
Have your homeowner's documents on hand. These documents will confirm the size of your property and proof of sales price. You'll also want to include invoices and receipts for any upgrades or major repairs, warranties on the work done or new appliances, and so on. The more documentation you have to show why you want to list at a particular price, the better.
The home appraisal process may be intimidating because you aren't sure if the appraisal will match what you think the house is worth. However, by having an appraisal before listing, you can rest a little easier knowing that is one less thing that could hold up the transaction.