One of the many steps in selling your home is to undergo an appraisal by your bank. Whoever is buying your home may be perfectly happy to pay your asking price, but their mortgage lender will still require an objective third party—the appraiser—to check out your house to determine its value.
The purpose of the appraisal is to ensure the mortgage holder does not lend money on a property that doesn't have sufficient equity. Having your home appraised can be a daunting task, especially if it's your first time going through the process of selling your home. Knowing what the appraiser is looking for before they arrive can help ease your mind, and could help make an impact on the appraisal value.
Here is a list of factors the appraiser will evaluate:
The appraiser will start outside your home by looking at the structure, the foundation, the roof and the siding to determine the quality and the condition. They are looking for cracks, leaks and any type of damage to the structure, either resulting from defective construction or damage from weather or other causes. To help sustain the value of your home, you should have any damage to the structure fixed before they arrive.
2. Property size
The size of your lot and the size of your home (its square footage, especially) will both impact the value of your appraisal. The number of bathrooms and bedrooms you have, particularly if they are fairly large and comfortable, will also reflect well on your home's value.
To get a clear picture of what the appraiser is looking for on the inside of your home, you need to first imagine it without all of your furniture—the appraiser is there to evaluate the condition of the property, its layout, and its size, not your decor. Then you can take a look at the material and quality of the walls, the ceiling, flooring, windows, doors, appliances, and even your light fixtures. It's often worth the extra couple of dollars it will cost you to repair and update these interior items before your appraiser arrives, especially if you're still rocking the old ceiling light that came with your home when you bought it back in the 80s or you haven't cleaned your carpets in decades.
Yes, the appraiser does look at what amenities your home has to offer. This includes features like central air conditioning, insulated windows, baseboard heat, a garage, smoke detectors, fireplaces, and security systems. They will also take a look at your outside amenities, such as a pool or gazebo.
5. Upgrades and renovations
Keep a record of all the upgrades that you've made to your house to show the appraiser. Upgrades include:
- Remodeling in your kitchen, such as countertops, cupboards, and sink
- New kitchen, bathroom, or laundry appliances
- Bathroom upgrades, such as new toilets, sinks and light fixtures
- Major landscaping projects
- New or efficient HVAC systems
- Plumbing and electrical upgrades
Don't include any appliances that are not permanently installed.
6. Front & back yard
The size of your yard will impact your appraisal as well. Unfortunately, there is nothing you can do to help on this front, but you can make sure that you house is landscaped and well kept. Adding a sprinkler system and other fixtures in your front or back yard will add to your home’s value.
7. Comparable properties
An appraiser will also typically look at three or four comparable properties that have been recently sold in your area. They may not be exactly the same size or layout or be in comparable condition, but the selling price of these homes can help guide your appraiser's calculations.
Having your home appraised as part of the selling process can be a nerve-wracking experience. Knowing what the appraiser is looking for and making minor updates can help improve the value of your home and ensure a smooth sale. The appraiser will look at:
- Your home's exterior
- Property size
- The interior of your home
- Upgrades and renovations
- Front and back yard
- Comparable properties
Need help preparing for your home? Read our Ultimate Guide: