Whether you’re selling or buying a house, the appraisal process is an incredibly important part of the transaction. If you’re a seller, you’ll want to understand the factors that affect your home’s value. If you’re a buyer, the appraisal will help you feel certain that the price you’re paying for the home makes sense.
With that in mind, we’ve brought you the ultimate home appraisal checklist for buyers and sellers. Read on to learn what an appraisal is, how it works, and how you can ensure your buying or selling process goes as smoothly as possible.
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What is an appraisal?
The goal of an appraisal is to determine how much a home is worth in the current real estate market. The appraisal is an essential step because most mortgage lenders will only give buyers a home loan that’s worth the appraised value or less.
That’s why the appraisal is such a crucial part of the home. If the appraisal comes back too low, the buyer may not be able to get a loan amount that’s large enough to purchase the home at its current price tag. However, if that does happen, know that all hope is not lost. The buyer and seller may have the opportunity to appeal the appraisal or renegotiate the sale price.
How does an appraisal work?
Similarly to a home inspection, an appraisal starts with a third-party professional visiting the home. However, instead of checking that the home’s systems are all in working order, the appraiser will be looking to determine the home’s value.
The appraisal inspection will take multiple factors into account, including:
-- Square footage
-- The number of bedrooms and bathrooms
-- Any recent renovations or updates
-- The home’s overall condition
In addition to the home visit, the appraiser will also take a look at the home’s comparables. Comparables are similar properties that have sold recently in your area. Using these homes, the appraiser will adjust the value of the property based on how its condition and features stack up to the rest of the neighborhood.
Sellers’ home appraisal checklist
Though you can’t easily change certain aspects of your home, like the square footage or the number of bedrooms, there’s still a lot you can do to prepare for the appraisal. Below are some tasks that will help your home make a great impression on the appraiser:
– Make minor repairs
When you’re selling your home, it’s important that the property in the best condition possible. That means finally getting around to all those small repairs that have been cluttering up your to-do list. That includes handling issues like peeling paint, missing handrails, broken windowpanes, etc.
– Pump up your curb appeal
You’ll also want the outside of your home looks its best, which means paying some extra attention to curb appeal. If you haven’t already, make sure your lawn is put on a regular maintenance schedule, invest in a few fresh flowers to perk up your exterior, and ensure your front entryway feels welcoming.
– Consider cosmetic upgrades
Making some quick updates to your home before selling can have a big payoff. Consider putting a fresh coat of paint on the walls or updating your bathroom vanities and kitchen backsplash.
You can also make a list of any recent upgrades and improvements that you’ve made in your home and share them with the appraiser. This extra step can help you highlight the unique features of your home.
– Clean, clean, clean
While the appraiser technically won’t be measuring how clean your home is, a messy house could subconsciously influence the appraiser’s overall opinion of your home. Before listing your home, be sure to do a deep cleaning and decluttering of your house. That way, you’ll only need to do a quick sprucing up on the day of your appraisal.
Tip: Want to avoid spending time and money on repairs in preparation for your appraisal? Consider selling with Orchard – we’ll purchase your house for market-price in its current condition.
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Buyers’ home appraisal checklist
As the home buyer, the appraisal can be especially nerve-wracking. After all, you don’t have much control over the appraisal, but its outcome directly affects your ability to buy the home. That said, here are some steps that you can take to prepare for any result:
– Have patience
Though you may be anxious to have the appraisal done and over with, the process does take time. The lender usually orders the appraisal as soon as all the contracts are signed, but in busy markets, it can take the appraiser a few days to get out to the home. Do your best to be patient and know that a delay doesn’t necessarily mean that things have gone wrong.
– Be prepared to negotiate
If the appraisal comes back lower than the current sale price, the first step is to try to negotiate with the seller. Ideally, they will agree to accept a sale price that’s closer to the appraised value of the home, which will allow you to finance your home purchase without a hitch.
– Have a back-up plan
In the case that the seller doesn’t budge on price and your lender won’t lend you the full amount, you’ll need to have a back-up plan. Are you willing to put up more money to cover the difference? Would you rather back out of the deal and consider other homes? Or is it worth asking the appraiser to appeal their decision? Only you can decide what’s best for you and your family.
Tip: To help justify the original purchase price, your real estate agent can submit additional comparable homes or other evidence of market trends to the appraiser.
While this home appraisal checklist can help you prepare for the road ahead, the process of buying or selling your home can still be full of potential roadblocks. If you’re looking to streamline your home sale or purchase, consider working with Orchard.
For those buying a new home and selling their current one at the same time, we’ll help you make a competitive, non-contingent offer to buy your next home. Then, we’ll help you sell your current home for top dollar in 120 days or less. Our service also eliminates the stress of lining up your buying and selling timelines so you can focus on finding your dream home.
Interested in learning more about Orchard? Start by getting a free offer on your home: