Buying and owning a house is one of a person’s biggest dreams and goals in life. It is one of the reasons people hustle and grind every single day. From the moment we understood the concept of work as children, our parents have taught us always to work hard to achieve our dreams so that someday we can have our own house and live a comfortable life. ;
Owning a home is a huge responsibility. Once you achieve your goal of owning a house, you need to take good care of it and all the expenses that go with it. And in the eventuality that you would consider having your mortgage refinanced or sell your property, you should know how a home appraisal fits in the picture. ;
What is Home Appraisal?
An appraisal is an important part of refinancing or selling a property. It is conducted by a certified or licensed professional who provides an objective and unbiased opinion of a property to come up with a fair valuation for it. ; ;
If you are considering having your mortgage refinanced, you need to understand an appraisal’s role in the entire process so you know how to go about it properly. ;
A lot of things will hinge on the home appraisal if you’re thinking of refinancing. If the value of the property is low, refinancing is no longer an option for you. If the appraisal shows that your home’s value is at less than 20% home equity, you will end up paying for a PMI (private mortgage insurance) or need to bring some cash for a cash-in refinance. You also might not get a lower interest rate because, in most cases, lenders look at those with less equity a lot riskier. ;
How to Prepare a House for Appraisal:
You might be thinking that you need to have your house remodeled or renovated to get the best possible assessment, but it doesn’t have to come to that extreme. You need to know what appraisers are looking for. Most of the time, it’s really just the small details that matter. Of course, some fresh paint, updated fixtures, and new flooring won’t hurt, too. ;
- Have your home inspected
Before the appraiser comes knocking on your door, you need to get some home inspections done in and around your property so you are aware of any issues that could potentially become problems during the appraisal. ;
- Work on repairs and upgrades
Once the home inspector has already identified the potential problem areas, you need to get around to addressing all of them one by one. Fix what needs to get fixed. Replace whatever needs to be replaced. You can also go the extra mile and update some of the fixtures around the house, or even give your home a fresh coat of paint. ;
All of these will add not just to your home’s aesthetic value but to its market value as well, giving you a good return on your cash out for upgrades. ;
- Stage the property
Okay, let’s say that you did everything you needed to do and had your home fixed and updated to meet or exceed market standards. The next thing you need to do is stage your homefor the appraisal. You need to make sure that your home is in its best form to make a good impression on the appraiser. Not everyone takes advantage of this small step, but if you do this, it helps you get a much better appraisal on your property. ;
- Improve its curb appeal
Part of staging your property is increasing its curb appeal. How your house looks from the street already makes people form an opinion about your property. No matter how nice the interiors are, if the house looks worn down from the outside, it can bring down the evaluation, which you don’t want to happen. ;
- Have an offer list on hand
If your property has been getting a few offers, you can show a list of the offers to the appraiser. Multiple offers that fall within a certain price range will somehow confirm your home’s value and give the appraiser a good base point to start with. ;
Having your home appraised gives you a rough estimate of its worth. Lenders need this information because it gives them an idea of how much money to lend you.
If you’re not happy with the appraisal, you can always make an appeal and request for another appraisal. However, note that it is uncommon for an appraisal to be turned around unless there’s substantial evidence that the estimated value is way off.