Getting ready to apply for a refinance? Selling your home? Are you wondering what your property might be worth beforehand? Here is everything you need for home appraisal.
When you first complete a loan application, you’ll notice there is an area where you estimate your property’s value or in the case of a purchase the sales price, where you enter the agreed upon price. Most people have a pretty good idea and if you’re not sure, just put down an estimate. When working with an agent to sell your home, your agent will provide recent properties that have sold that can provide an insight on what the property will sell for and when.
When you first bought your home, the appraiser was first provided with a signed copy of your sales contract. The appraiser then takes that information and compares your accepted offer with closed and recorded sales listed by the county. Most often the appraised value is the same as the sales contract. All things being equal, it was an agreement between you and the seller where the highest price you were willing to pay and the lowest price the seller was willing to accept met. Yet when refinancing, there is no sales contract. Your home is compared directly with recent sales. In order to achieve maximum value, there are some things you can do. And there are also some things you absolutely must do before the appraiser can complete the appraisal report.
You first want to present a favorable curb appeal. This is the first visual the appraisal will have upon arriving. There’s no need to plant new shrubs or landscaping but do make sure the lawn is freshly cut and free of debris. In fact, make sure all exteriors are clean and swept. Inside, get rid of clutter and have a clean living space as well. You don’t need to hire a professional crew to come through your home but you do need to pay attention to flooring and walls. A clean carpet and shining wood floors let’s the appraiser know you take care of your property and the home is in good physical shape.
What have you done to the property since it was first purchased?
Have you made any upgrades or additions?
Before the appraiser makes it to your home, the recorded price you paid will be researched and noted. The appraiser won’t know you remodeled your kitchen or bath.
Did you put in additional insulation?
Let the appraiser know about the upgrades you’ve made that wouldn’t be noted in the county records. The appraiser will walk throughout the entire house and if you have an attic it will be inspected as well. The appraiser is going to come up with a final value and that also includes making adjustments for items that need repair or further attention. If the appraiser notices cracks around a door jamb it could indicate foundation issues. Or simply peeling paint around the windows might be noted. After you’ve done all of these things, it’s time to back away. You don’t want to follow the appraiser around the house while the property is being inspected.
Your Own Checklist
Once you submit a completed loan application, your lender will order the appraisal from a third party called an Appraisal Management Company. The appraiser assigned will contact you within a couple of days to schedule the appraisal. But unless you’ve installed required safety items, the appraiser won’t be able to complete the appraisal and either cancel the appraisal altogether or file an incomplete appraisal pending the installation of these required items.
California State Law requires that all properties have CO (carbon monoxide) detectors installed in the main living areas on all levels.
Smoke detectors must also be installed on each floor and in each bedroom.
Next, make sure all hot water heaters in the home are double strapped to the supporting wall.
It’s important to note that if these requirements aren’t followed the appraisal cannot be completed.
This is very important for homeowners who are refinancing. If your interest rate on your loan is locked and will expire say within 30 days you want to avoid any delays while giving the appraiser enough time to complete a proper appraisal as well as providing your lender with plenty of time to complete the approval process.
The underwriter within the mortgage company won’t evaluate a refinance application if the appraisal is not included with the loan file. The same precautions need to be taken if you’re selling your home. You have a closing date looming and if the appraiser can’t deliver the appraisal on time this can also create yet another delay if you’re selling your home and buying another. It’s an unfortunate domino effect and your agent, the appraiser and the lender can’t change.
The appraiser is required to make an independent valuation of your property without any undue third party influence. It used to be that lenders could contact an appraiser directly to order and appraisal and even contest a completed appraisal when the value came in lower than required. That’s no longer allowed. You, however, are not considered “pressure.” There are things you can do on your own to help get the highest value possible and we discussed them here. But after that, the appraiser is off to complete the report. Just remember, that whatever you do, make sure you have the required smoke and CO detectors as well as properly securing your hot water heater per California statute.
“Chad, it was a pleasure working with you. Your loan was smooth, speedy, and we were kept well informed. I will make sure to prioritize offers where you are the loan officer as I know they run smoothly.”
“Chad and his entire team were over the top amazing, professional, and attentive throughout the entire home loan/buying process. I could not have asked for a better team to have on my side through what could be one of the most challenging and stressful processes one experiences. From the first conversation I had with Chad, I felt comfortable with him. He helped guide us through the process without ever once making us feel uneasy, unimportant, or uninformed. I never felt silly or stupid for asking the same questions over and over until I fully understood what we were getting into, or until something made total sense to me. The home loan world is fast paced, overwhelming, and confusing, and Chad and his team held our hands and helped us to feel comfortable and confident about our choices. He and his team were always there for us day or evenings, weekdays, or weekend and never made you feel like you were a bother if you had a burning question you had to get answered at 8pm Saturday night. I will use them again and again, and suggest them to any friend, family, or acquaintance. Seriously, they are rock stars. They work hard for you to get you into your dream home, we could not be happier with their hard work, dedication, and kindness.”
As a first time home buyer, I wasn’t sure what to really expect, but Chad and his team made the process very clear and easy. Once the process was over, they didn’t just vanish either. They kept in touch and looked for opportunities that may benefit me. A couple years later, they found me a great refinance opportunity that saved me a lot of money! Once again, the process is long and grueling, but Chad and his team made it as painless as could be. Any barrier that I encountered, they found a quick solution to make it happen. Mortgages are a huge commitment and I wouldn’t pick any other team to help me make the right decisions.”