During a home appraisal, a professional property appraiser evaluates a property to assess its value. They use an analysis of the property, research regarding recent sales of similar properties, and their own judgment to form a professional opinion. Then, they compile a report that shares their findings. As OpenDoor explains, home appraisals are important because they can impact how much a lender is willing to lend a buyer to purchase the home. After all, mortgages are generally secured by the property, so few lenders will allow someone to borrow more than a property is worth. If you’re selling your home to a buyer who is banking on a mortgage to buy the property, an appraisal that’s lower than the purchase price could be a major hurdle. What hurts a home appraisal?
What Hurts a Home Appraisal?
What happens if your buyer cannot get the funds that they need from their lender because of a low home appraisal? They may come up with the money from another source. They may try and use the appraisal as a reason to renegotiate the price. Or, they may walk away. As a seller, a low home appraisal doesn’t do you any favors. Understanding what hurts a home appraisal allows you to be proactive. You can take steps to mitigate or correct these issues before they hamper your efforts to get the best price for your home. So, what does an appraiser look for? And what hurts a home appraisal?
What an Appraiser Looks For
When an appraiser is evaluating a property, they’re trying to determine its value by weighing various factors. To do that, they’ll look at sales of comparable properties and take a close look at the property itself. What does an appraiser look for? According to NerdWallet, a home appraiser’s checklist is likely to include the following items:
- Size of the home
- Size of the lot
- Age and design of the home
- Condition of the home
- Materials used in the home’s construction
- Appliances and systems present in the home
- Amenities present in the home
- Improvements and renovations made to the home
- Neighborhood characteristics
- Trends in the local housing market
- Sale prices of comparable homes that were sold recently
What Hurts Your Appraisal
While you may not be able to do much about the size of your home, the number of bedrooms or bathrooms it contains, or how much the neighbor’s house sold for, there are other potential issues that you can address. Redfin offers some problems that can hurt your appraisal and some possible solutions:
- Curb Appeal Issues: Poor curb appeal can make a bad first impression. Get off on the right foot with both appraisers and buyers by taking steps to ensure that your property’s first impression is a positive one. Update the entryway and landscaping and keep things simple and neat.
- Outdated Finishes and Appliances: The kitchen and bathrooms are major selling points, so if they look like they’re caught in a time warp, you’ve got a problem. Updating pulls and fixtures and freshening up walls and cabinets with paint can make a huge difference.
- Small, Dark Bedrooms: To make the most of small, dark bedrooms, clear out anything extraneous. Paint the walls a light neutral color, and get rid of any heavy window treatments. Consider installing a mirror to make the space seem larger and more open.
- Systems in Need of Replacement: If you have any mechanical systems in need of maintenance or replacement, now is the time to deal with them. If your electrical, plumbing, or HVAC system is having issues, a buyer is likely to make having it repaired or replaced part of the purchase agreement. Getting it repaired or replaced before you put the home on the market means you won’t have to worry about losing a sale over it.
When you’re searching for a home loan that fits, turn to the loan experts at PrimeLending Twin Cities. Our friendly, knowledgeable team takes the time to listen carefully to your goals so that we can find the ideal loan product for your needs. Contact us today to get started.