Whether you’re a first-time seller or a seasoned pro, the appraisal process used to determine your home’s fair market value can be a little intimidating. Lenders require the appraisal to ensure they’re not loaning the buyer more money than the value of the home. So if the appraisal comes in lower than the sale price, your buyer will need to come up with the difference in cash or negotiate to lower the sale price. And if you can’t reach an agreement, your buyer can walk away from the deal thanks to their appraisal contingency. Still, Lonnie Heward, a certified appraiser in the Phoenix metro area with over 20 years of experience, emphasizes that an appraisal is nothing to worry about: “The process is a lot of common sense. We don’t do any magic . . . All an appraiser is, is a glorified reporter. All we do is collect data, put it together in a report, and give it back to you.” The appraiser aims to fairly and impartially determine your home’s value. While most of the appraisal process is out of your hands, there are tangible steps you can take as a seller to ensure a fast and accurate appraisal. We spoke with several appraisers and a top real estate agent to bring you the thirteen best home appraisal tips for sellers. The offer you choose may influence the fate of your home appraisal. For example, if you sell to a cash buyer, they may waive the appraisal contingency and entirely skip the appraisal. In a strong seller’s market, a buyer may offer to make up the difference between the appraised value and their offer in cash to close the sale. Mark Deering, a top real estate agent in Grand Rapids, MI, shares, “In this hot market, we see six to 15 offers on a home, and each offer has 30 items that can be negotiable. There’s a lot of variables, and you might not even pick the highest price offer if there’s another one that just has better terms and less contingencies.” Lean on your real estate agent’s expertise and experience to choose the best offer for your selling goals. If you choose an offer with an appraisal contingency, review the deadline to ensure it’s reasonable. When an appraiser calculates your home’s market value, it all comes down to how your home stacks up against comparable properties. Comparable properties, called “comps,” are homes recently sold in your area with similar characteristics to yours in terms of square footage, number of bedrooms and bathrooms, amenities, and overall condition. If you partnered with a top agent, they would have considered comps when setting your home’s listing price. So as long as your home sells for close to listing price, there shouldn’t be any surprises when the appraiser comes around. Deering emphasizes: “Your agent did a good job of coming up with market value when you listed it . . . so the appraisal is just a formality. The appraiser is just reassuring the bank that’s financing the mortgage that yes, they’re paying $250,000 and yes, it’s worth $250,000.’” Now, say you’re selling in a competitive market where prices are on the rise and your home sells for well above the listing price. In this instance, your agent will need to justify why the high sale price is a fair market value. To do so, they can round up the comps for the appraiser and indicate why your home is of equal or higher value to them. Rachel Massey, a certified appraiser based in Ann Arbor with over 30 years of experience, says that the effectiveness of this strategy depends on the appraiser: “Appraisers are individuals, just like agents are. Some will appreciate the ‘sales’ that are provided. It is up to the appraiser, however, to determine if the sales are ‘comparable.’” While the amount of work and money you put into your home is obvious to you, it may not be obvious to an appraiser. Help them out by providing a detailed list of the upgrades you’ve completed in recent years. You’ll rarely see a dollar-for-dollar return on your renovations, but they may help boost your home’s overall value. Angela Miller, a certified appraiser in Tidewater, VA with over 25 years of experience, shares that the market also dictates how much value renovations add. For instance, she recently appraised a condo that sold quickly thanks to a hot seller’s market. Although this condo was far more dated than a recently remodeled condo in the same area with a new kitchen and bathroom, the condo only sold for $4,000 less. “I was floored,” she says, but that was what the market valued it at. After you’ve cataloged the upgrades for your home, collect the permits for any projects that require them. Not all appraisers will follow up on these details, but they can ask you for documentation or consult public records if they’re particularly diligent or suspicious about a code violation. By providing proof that your renovations are code-compliant, you can help speed up the appraisal process.1. Choose the best offer on your home (hint: it’s not always the highest)
2. Partner with a real estate agent who knows how to round up comps
3. Compile a detailed list of recent upgrades
4. Round up relevant home permits for renovations completed during ownership
