Answering three common questions about appraisals to prepare sellers.
Are you thinking about selling your home? If so, how exciting! This process means a fresh start and new beginnings. However, before you list your property, it is important that you completely understand appraisals. An appraisal is an opinion of value, where a licensed appraiser will come to your house and provide an opinion of value. They will provide a written report based on their research and home visit – this is what the lender uses to determine your home’s value. This could greatly affect the success and price point of your sale, so it is crucial to be prepared. Here are three common appraisal questions and their answers:
1. What are appraisers looking for? They consider a wide variety of factors, like the floorplan, quality of construction, finishes, number of bedrooms, and square footage. They will compare your home to the listing to make sure the features are accurate. Also, they’ll take note of any upgrades that have been made to the house and if there were the proper permits for them, so make sure you have all of that in order beforehand. Last, they will be looking at comparable home sales in your area.
“Make sure you have a professional on your side to guide you through your options – an agent’s experience dealing with appraisers and reclaiming value when there is a gap will affect your bottom line.”
2. Why does an appraisal gap occur, and what should I do if it happens? Home prices have risen rapidly, which increases the likelihood of appraisal gaps. That happens when the value the appraiser provides is less than the agreed-upon price. There are several things you can do if this happens, so make sure you have a professional on your side to guide you through your options – an agent’s experience dealing with appraisers and reclaiming value when there is a gap will affect your bottom line.
3. Should I get a pre-appraisal done? This is when sellers get an appraiser to look at their home before they list. I understand why people might think to do this, but I wouldn’t recommend it. First – once you go under contract the buyer’s lender will order a new appraisal regardless of how recently your pre-appraisal was done. Second – appraisals are $500+ depending on the home. An agent well-trained in pricing and general appraisal practices and give you the right market insight to price for top return but also accounting for guidelines and restraints on the appraiser that will affect value. There is no need to take on extra cost for something that won’t benefit you during the contract process.
Appraisals can be a confusing part of the process for many people, so don’t hesitate to ask me any questions that you have. Call or email me anytime; I am here to be your real estate resource. I look forward to helping you through the selling process!