Category Archives: Appraisal Help

How to Get the Highest Value On Your Home Appraisal

Wether you are looking to refinance or sell your home, you are going to need a home appraisal.  How to get the highest value on your home appraisal?  You are going to need to prepare your home prior to the appraisal to maximize value.  By preparing your home before the appraisal not only maximizes value, it also ensures that the process is not jeopardized.  If your appraisal doesn’t go well, your refinance or sell may become more stressful than you could imagine and your deal might fall flat.

To best prepare for your appraisal, you are going to want to become familiar with the appraisal process.

(Click here to get help Understanding The Appraisal Process)

To Maximize Value Take a Fresh Look at Your Home

You will want to put your homes best face forward in order to obtain the best valuation of your home.  Before an appraisal, try to look at the interior and exterior of your home addressing any issues so that your house looks clean and well-kept.

Start with the outside of Your Home

If weather allows, mow and trim the lawn.  Address any broken fence areas, stairs, guard rails and down pipes.  Clear debris and trim plants from the walkways.

Next take a look at the exterior of your home.  Do you have any peeling paint, cracked or missing bricks?  Peeling paint is one of the big things appraisers looks at.  Peeling paint can quickly tie up FHA mortgages and sometimes even kill the loan.  It is absolutely worth your time and money to repaint any worn or damaged areas to avoid any hold ups.

Next take a look at the inside of your home

After you’ve addressed everything outside, enter your front door and get a look at everything through your appraisers eyes.  A clean and organized home projects a positive view and can increase the appraised value.  If your home needs some relativity-minor repairs, they may hurt your appraisal.  Fixing or replacing all non-functioning doors, torn screens, worn out carpet and basic plumbing and light fixtures may not cost you much time or effort and may make the difference between a higher condition rating.

Keep your appraiser’s comfort in mind

You don’t need to do anything special for your appraiser.  Just allow them to do their job efficiently and effectively.  Give them space to work, allowing them to complete their process without asking questions that distract and keeps them from focusing.  Questions are best kept for the end of the inspection once they have completed their process.  If you have a dog, lock them up to keep them from jumping or barking at them while working.  Again, your questions are welcome and the appraiser is happy to answer them after they have finished gathering the necessary information.

Keep track of all repairs or updates to your home

A new water heater, furnace, air conditioning unit, etc. might not be visible to the eye, point it out so that your appraiser is aware of it and can give you the credit for your updates.  Many people offer a printed list of the home repairs.  This is helpful and appreciated by your appraiser.

The bottom line is to get the most out of your appraisal without too much stress.  Appraisers are trained to be careful and fair in their inspections, you just want to make it as easy for them as possible to see the value.

Deferred Maintenance

Deferred Maintenance

Getting the Highest Value From Your Appraisal and Avoiding Deferred Maintenance

What is Deferred Maintenance?

Deferred Maintenance is neglecting to fix any worn or broken things in your home.

Generally speaking, allowing deferred maintenance in your home can decrease the value of your asset.  It may result in higher costs over time and in some cases, cause health and safety hazards.

How does Deferred Maintenance Impact My Home Appraisal?

Deferred maintenance can impact your home appraisal in a couple of different ways.  At one end of the spectrum, it can effect the value of your appraisal or sale.  At the other end of the spectrum, it can kill the possibility of your loan or home sale.

Properties must meet certain minimum standards before a lender will accept a loan.  If the deferred maintenance is significant enough, the mortgage company will ask for repairs or decline the loan.  If a buyer needs a loan and the lender will not accept the condition of your home – no sale.

Broken windows, water issues, electrical problems, and even peeling paint can delay the process and impact the loan acceptance.  Less significant items like, stained and worn carpet, missing baseboards, patchy paint, holes in the walls or ceilings, etc. can also have an impact on your appraisal process.  These items might not kill the deal but they won’t help.

Interior and Exterior Deferred Maintenance

Repairs can be found on both the interior and exterior and frankly anywhere on your property that has been neglected.  Fences, in disrepair may be considered a safety issue.  Broken hand rails and even peeling paint can all effect the condition of your home appraisal and impact the green light on your loan.

Deferred Maintenance and the Condition of Your Property

Today, an appraiser rates the condition of your home considering the deferred maintenance and the general condition of your property.  They do this by using a series of condition ratings numbered from one to six.  C1 is generally new construction.  C2 or C3 have few, if any, deferred maintenance or repair issues.  C4, C5 or C6 homes, have visual deferred maintenance and repair issues requiring sometimes significant attention.

Once your home has been assigned a condition rating, it is compared to other home conditions in the neighborhood.   If the condition of your neighborhood is generally above that of your home, the appraiser will make an adjustment down for the difference.  This is not necessarily what you want when trying to obtain a loan for maximum value.

Deferred maintenance further impacts your home when trying to sale.  Prospective buyers might not appreciate your worn out carpet or the paint job your friend tried to help you with.  The offers you receive might take repairs into consideration with the overall price offered.  This often costs you more then it might have to just fix it in the first place.

How to avoid Deferred Maintenance?

Keeping your home up to date, free of repairs and in general good condition not only helps you with your home appraisal and loan possibilities but it keeps you free for all transaction possibilities.  This allows for the highest asset appreciation, which in the end is good for everybody.

If you are in need of a real estate appraisal, it is a good idea to walk around the inside and outside of your home.  Look for anything you can easily repair prior to the inspection.  This saves you time and money and speeding the loan process for a smooth transaction.

Take a look at the following pictures to get an idea of what an appraiser sees as they enter a room.  Broken fences and windows, missing flooring and dirty carpet give you a less appealing view of the condition.  New flooring, windows, paint and fence gives an overall feeling of “pride of ownership” and thus a higher condition rating.

 vs 

  vs  

 vs 

FHA Appraisal

home-inspection1What You Need To Know When Getting A FHA Loan and FHA Appraisal

Get Ready To Fix All Safety Hazards

An FHA Loan is a mortgage backed by the Federal Housing Administration (FHA).  This means that the government insures the loan providing less risk for the mortgage lender in case the mortgage goes into default.

If you are currently looking at refinancing your home with a FHA Loan, you will need to keep a few things in mind when getting your FHA appraisal.

Your appraisal will have to be completed by a special FHA approved appraiser.  This approved appraiser will look at all the factors a regular appraisal would require but takes a more in depth look at any risk, health and safety issues of the home.

Here are some key inspection areas required by HUD:

•Above all, the home must be habitable and comfortable, without any potential hazards to the occupant.

•The lot should be graded to allow water to drain away from the home.

•All bedrooms should have an exit to the exterior of the home.

•Many homes built before 1978 still contain lead-based paint, which is a potential health hazard. In these homes, the appraiser will check for damaged paint (peeling, chipping, etc.). Such conditions must be corrected before the loan will go through.

•All steps and stairways must have a handrail for safety. This is a common area of correction.

•The heating system must be sufficient to create “healthful and comfortable living conditions” inside the home.

•The roof should be in a good state of repair and must keep moisture from entering the home.

•The foundation should be in good repair and able to withstand “all normal loads imposed” on it.

According to HUD Handbook 4150.2, the home “must be free of all known hazards and adverse conditions that may affect the health and safety of the occupants.”

As an appraiser the things we find most often in need of repair before the loan can be approved are:

Peeling paint                                         Cracked or Broken Windows     Missing Stairs/Banister/Handrail

Peeling Paint       Cracked Window                          Missing Banister

Inadequate window size in basement to allow for emergency exit

egress-window-michigan-240x300

*Note to the homeowner – If you have any of these needed repairs, it is a good idea to fix it prior to the appraisal.  That way your appraisal will be marked as is and you will avoid any additional appraisal costs for additional inspections and reports.

The main thing to remember is, if something in the home poses a threat to the health and safety of the occupant, or to the structure itself, the appraisal will probably be marked “subject to repair”.  The homeowner will then have a chance to repair the deficiencies.  If the homeowner chooses not to complete the repairs the loan will not be approved.