How Homes Are Appraised: Last Minute Guide to Juking the Stats

So you’re ready to sell your house. Before you can close the deal, your house will have to be appraised. Having a valid appraisal effects whether or not your house will sell, so here’s some essential information you’ll need to know about appraisals.

What Goes into an Appraisal?

Anatomy of a Home Appraisal

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Buyers need to have an appraisal done in order to get a mortgage loan. Banks need to know how much the house is worth and will not loan more money than what it’s appraised for.┬áIncluded in the appraisal is the house, all permanent fixtures (sheds, etc.) and the land. The appraiser will also look at how much comparable houses sold for recently, which will help determine the appraisal price.

After the appraisal has been done, an appraisal report is created detailing an explanation for the value of the property. It will explain any structural problems as well as describe the condition of the home.

Ways to Get a Higher Appraisal

Higher Appraisal

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If you’re selling your home, it’s important for the appraisal to be an accurate representation of what your home is worth. If your home is underappraised, it’s very possible that the offer on your house will fall through unless the buyer can pay the difference in cash. Here are some ways to get a higher appraisal.

Fix What Needs Fixing

Before you have your home inspected, go through and make a list of things that need to be fixed. Whether it’s a drippy faucet, a missing doorknob or a hole in the drywall, get it fixed. Once you have a list of things to be fixed and what you need to get them fixed, head to the hardware store and get the supplies. If needed, put a new coat of paint on the walls as well, so everything looks fresh and clean.

Get Your Home Pre-Appraised

Pre-Appraised Home

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Before you receive any offers, have your home appraised. Choose an appraiser who is from your county (if possible) and knows the area. Make sure that the appraiser has quality credentials, such as being an appraiser through a national organization like the Appraisal Institute.

Sometimes the data of comparable homes can be skewed by foreclosures or short sales. Before the appraisal, talk to the appraiser about any of these in the area, especially in your neighborhood. Often the information given to appraisers is not detailed, so they may not know that a house sold for a lot less because it was infested with termites and foreclosed.

Once you have this appraisal, it will be easier to set a realistic selling price for your home. When you receive an offer, you can give this report to the appraiser hired by the buyer to help him or her create the appraisal for the bank.

Question a Low Appraisal

Low Appraisal Questions

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If your home receives a low appraisal, question it rather than accepting it. It’s possible that the appraiser made a mistake. Go over the appraisal report and see if anything was missed, especially if the pre-appraisal included something that the appraisal for the bank did not.

Using these tips, you should be able to get an accurate appraisal so that you can sell your home for the right price.

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