You found your dream Westfield area home. Now it is time to cross all your “T’s” and dot all your “I’s” before it becomes all your own. And one of the first items on your closing checklist is the home appraisal. So, what exactly is that?
Your Guide to a Home Appraisal
The home appraisal is essentially a value assessment of a home and property. It is conducted by a certified third party and is used to determine whether the home is priced appropriately. It is also one of the “hidden fees” every buyer needs to be aware of when purchasing their home. According to Manta.com, Westfield area home buyers should expect to pay $363 on average for their appraisal.
During a home appraisal, the appraiser conducts a complete visual inspection of both the interior and exterior of the home. He or she factors in a variety of things, including the home’s floor plan functionality, condition, location, school district, fixtures, lot size, and more. An upward adjustment is generally made if the home has a deck, a view, or a large yard. The appraiser will also compare the property to several similar ones that were sold within the last six months (or less) in the area.
The final report must include a street map showing the property in question as well as the other comparable properties, photographs of the interior and exterior, an explanation of how they calculated the square footage, market sales data, and public land records, among other things.
After completion, the lender uses the information found in the home appraisal to ensure that the property is worth the amount they are investing. This is a safeguard for the lender as the home acts as collateral for the mortgage. If the buyer defaults on the mortgage and goes into foreclosure, the lender generally sells the home to recover the money borrowed.
Lenders do not approve mortgage loans for more than their appraised value. If your appraisal comes back below the agreed sales price, you must then make a decision about how to proceed with the sale. First, you might try to negotiate with the seller to lower the price. Second, you could come up with the difference between the appraised value and the sale price out of your own pocket. (However, keep in mind that this is in addition to your down payment and closing costs.) Or you may want to go with a third option…walk away. Talk to your REALTOR® to determine your best course of action.
Whenever a buyer finances their purchase with a mortgage loan, the lender requires a home appraisal. If the property’s appraised value falls below the agreed-upon price, your sale may fall through. So, as the seller, you want to make sure your property is in tip-top shape before the appraiser comes through. Once you get into the escrow phase of the sale, you need to go through your home once again to ensure it looks great for the appraiser. That includes cleaning it until everything sparkles.
Home Appraisal: Does Extra Clean Add Extra Value?
Bottom line? No, cleanliness technically does not affect your appraised value. However, a spotless home creates a mindset with the appraiser similar to the one it creates with a buyer. Starting off with a positive impression never hurts. Plus, it makes the appraiser (even subconsciously) think that the homeowner kept up with the property’s maintenance.
Put in the Elbow Grease
Always, always, always clean both the interior and exterior of your property before a home appraisal. That means cleaning windows, deep cleaning carpet, mopping floors, scrubbing countertops, etc. Clear the clutter. Put away toys and clothes. Make the beds. Take out the trash. Touch up paint where needed. You make an appraiser’s job easier by allowing clear access to all areas of your home. By making their job easier, it puts them in a better frame of mind. While this should not affect your home’s value, we do tend to see higher numbers for cleaner homes.
List Your Updates/Upgrades
During a home appraisal, the homeowner and/or their representative are allowed to be present. But hovering over the appraiser may agitate them. You do not want that to happen. However, you can make it easier for the appraiser by providing a list of all updates/upgrades you performed on your property, especially those that are not easily seen. That includes upgrades/repairs to the plumbing, roof, irrigation, or HVAC system.
The Way to an Appraiser’s Heart…
…is through their stomach? Well, not really. Nevertheless, providing a nice snack and beverage can only help. When they grab for a cookie and a cold bottle of water, make sure to provide them with a list of comps in the neighborhood. Yes. Running comps is part of the appraisal process. Yet, some recent comps may not show up. Your REALTOR® can make sure to print off the most up-to-date list just before the scheduled home appraisal so that it is handy. Again, this makes the appraiser’s job a little easier.