How to help your appraiser (it could even end up helping your home’s value)

Real Estate Appraiser ChecklistYou may ask “what can I do to help the appraiser that will help my home’s appraised value?” I hope to share with you some things that can aid the appraiser and possibly have a positive effect on the appraisal report and hopefully your home’s value.

I had this topic picked out to include for a future blog post but decided to go ahead and write it now because of a  concern a friend had with an appraisal recently. The problem involved a home that was purchased with the intention to renovate and resell it. The lender had a problem with the difference between the first sale price (before renovation) and the most recent sale (after renovation). There apparently was some concern with the spread in sale price between the two different transactions, even though there had been extensive renovations. I did not look at the appraisal report but thought that the problem may have been minimized if additional information had been included that explained in great detail the terms of both sales and the work that had been done to the house between sales. While I cannot promise that what I say here will guarantee there will be no problems with the appraisal, I wanted to share my thoughts with you in the hopes that the lender will have the most complete information to make the most informed decision possible.

The best thing we can hope for is for the appraiser to provide the most complete data to the lender. One way to do this is for the owner or real estate agent to pass along to them any information about  the property that would positively impact it’s value. This includes, but is not limited to the following:

  • A survey that shows the dimensions of the lot, especially if your lot is larger than others or has advantageous qualities.
  • A list of features that your home has. Some may not be readily apparent to the appraiser, such as computer networking or a heated bathroom floor.
  • Any and all recent repairs and renovations along with the cost, especially if it was done by a professional contractor.
  • Information about a recent sale that may explain why you paid what you did, such as the home being a short sale or foreclosure sale, or that it did not include a real estate commission.
  • If you made recent renovations did you do them yourself (and save money in the process) or did you hire a professional contractor. You may have the skills and ability to make the renovations yourself and save lots of money. If you did them yourself, the money you spent may not reflect the true cost of the renovation, but you may still reap the benefit of them when you go to sell.

It is important to include all the positive features of your home, especially if you anticipate that the appraised value will be more than a recent sale on your property or before renovations. By including the cost of repairs and/or updates it will provide support for the higher value (if the market data supports it) and help the lender understand your thought process when coming up with the value you did. Cost does not always equal value, so what you paid to have an additional bedroom built may not mean you will get it back. By including a description of everything you did, and the cost to do it, you can at least make sure the lender understands everything that was done. Likewise, a complete description of a properties features and positive attributes will provide additional support for the appraiser reconciling the final value at the top of the range if it is supported. If you’ve had any experience with this type of situation I would like to hear from you so leave me a message below.

If you have any real estate appraisal related questions you can call me at 205.243.9304, email me, or connect with me on Facebook., Twitter, or Youtube.

 

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