One low home appraisal can unravel a seemingly solid deal. Even after a buyer and seller agree on a realistic price, if the appraisal comes in lower than the value, the burden ends up falling on the buyer to make up the difference. In these unfortunate situations, the deal will fall apart. Home appraisals take into account many criteria and with these tips a beneficial home appraisal is achievable.
First of all, a solid understanding of what a home valuation is based on is important in the real estate market and can help you prevent a low home appraisal.
Factors that play a role any home appraisal:
- Basic facts such as the age of the home, the square footage, number of bedrooms and bathrooms all influence the appraisal value.
- Necessary improvements can lower the appraised price. These can include the need for a new roof, driveway and even siding.
- The construction quality is important as well. Flooring, plumbing, and appliances like the water heater are noted.
- Many appraisers tend to value location nearly as much as the physical factors. A comparative market analysis, CMA, is likely to be included and homes in better neighborhoods with great schools and economic opportunity will be valued higher.
- A home may not change in quality or location but if the market switches from benefiting buyers to sellers, or vice versa, expect home appraisals to change as well.
Low home appraisals happen often and can drastically hurt the chances of selling your home if that is the final goal. A major cause is a declining housing market. When the number of comparable area homes sales declines, there is less data to appraise accurately. As sales numbers fall, and foreclosures and short sales rise, appraisal values can have wide spreads and be lower than expected.
You are now likely wondering what you can do to increase your chances of avoiding a low home appraisal. These tips will assist you in the process:
- Request that you would like an appraiser from your specific country (or neighboring county). They will have more relevant experience with homes in your area and increase the chances of appraising a value you’ll be happy with.
- Second, request that your appraiser have a residential appraiser certification and also a professional designation.
- Although you cannot meet with your lender, you may speak with your appraiser and this is advised. While they inspect the home, talk with them about the recent short sales and foreclosures you are aware of which will help the numbers.
- Before you list your home, get an appraisal. Use the Appraisal Institute website to search for a certified and experienced appraiser.
- Take into account the appraisal value when deciding on a listing price.
- Send the buyer’s appraiser a copy of the pre-listing appraisal.
- If a low appraisal does come through, don’t hesitate to speak up. It is possible or the appraiser to take into consideration new information.
Many people wonder how to avoid getting a low home appraisal. These tips will help accomplish this goal but do not underestimate the benefit of an experienced real estate agent. When it comes to the Phoenix housing market and customer satisfaction, Jeff Barchi is second to none. Contact him today to begin the process whether you are buying or selling.