Getting an offer accepted in today's competitive market can be exhilarating for both buyers and sellers. But an agreement between these two parties is only part of a longer process. The home also needs to appraise at the agreed-upon sales price so the lender can justify the loan amount. So how does this process work and what influences it? If you're selling your home, here are insights you can use to get a fair, informed appraisal for your property.
What does an appraiser do?
In short, an appraiser determines the current value of a property. They do this by performing a walk-through of the interior and exterior of the property and making note of any amenities such as a finished basement or swimming pool. They will also note health and safety code violations or other areas of concern. Most appraisers will utilize comparable home data (often referred to as comps) of nearby recent sales and neighborhood statistics to help determine a home's value.
Understanding an appraiser’s work style
Since appraisers are independent contractors (hired by the lender and typically billed back to the buyer), it's important to understand that they have their own preferences and work styles. While they are on your property, it’s essential to allow them one to two hours to complete the inspection without interruption. However, there are things you can do to make the appraiser's job easier — and help your home get an accurate valuation.
How can the seller help?
- Make sure all utilities are on
- Ensure spaces and mechanicals are clean, functioning and free of debris
- Replace burned out lights and make needed repairs
- Make sure crawl spaces, attics and outbuildings are accessible
How can your REALTOR® help?
- Be proactive. The appraiser typically expects to speak with the listing agent
- Report upgrades and the dates they occurred
- Tell the story of how you arrived at the anticipated closing price. For example, explain if the property attracted multiple offers
- Provide value trends, including closed comps, recent transactions and neighborhood data
Before the appraiser leaves, you or your Realtor may ask whether there are any needed repairs or known concerns, but understand that the appraiser may choose not to share this information with you.
What happens if the home appraises?
Hooray, your property appraised at the sales price! All systems are go and you’re on your way to the closing table. Now the buyer's financial and credit history will be verified, the lender will approve the home mortgage loan and the loan package will be submitted to the title company to prepare the documents for closing.
What happens if the home doesn’t appraise?
If a property appraises under the sales price, your Realtor can request a reconsideration of value. In this case, your agent and lender would guide the process, listing factors that should warrant adjustments, such as additional comps or alternate data. It’s possible that the appraisal could be reconsidered and you could still close at the price agreed upon by you and the buyer.
Ready to sell?
If you haven't yet put your home on the market or need help preparing your home to sell, reach out today and we’ll put you in touch with an experienced professional. Follow #SellerInsights on Facebook, Instagram, Twitter and YouTube to get more expert advice and insights.