Preparing for the Appraisal | Avoid Delays and Cancellations

Prepare for your appraisal to avoid delays and cancellations. The appraiser literally has the most control over the sale of your property. Knowing this beforehand and taking the necessary precautions will save your sale and the headache and expense that goes along with starting over with a new buyer if something goes wrong with the appraisal.

Unless you’re lucky enough to sell your house for cash, an appraiser is going to be part of your sale. So be prepared.

The appraiser is going to tell the bank what the value of your property is. Most of the time the appraisal will “come in at value” or at the price of the offer. It’s rare for the appraisal to come in higher than the price of an offer. In a market that rising in value quickly, your appraisal may come in below the offer price.

That can happen when the prices are going up faster than the houses are closing escrow.

What To Expect From The Appraisal

As with most aspects of the real estate process, it’s good to do your homework and know what to expect.

Remember, the buyer’s bank will send an appraiser to determine the fair value for your house – and the bank is usually the bigger investor in the purchase. So they’re going to be very careful about the value in their investment – especially in an escalating market where values can get out of control. We’ve seen banks put seemingly arbitrary caps on increasing prices.

Think of the appraiser like a buyer coming to look at your house for the first time. You want to give them a great first – and only – impression. Unfortunately, once you’re in contract with a buyer you’re not done keeping your house in tip-top shape.

Prepare for the Appraisal with Proper Curb Appeal

Always go for the best-looking house on the block when you’re about to get an appraisal. One of the biggest aspects of curb appeal is the landscaping. A beautiful home can get dinged by a messy front yard with weeds and unruly grass. So do a good job with cleaning up the front, making sure the lawn is mowed, weeds are pulled, leaves collected, and that there’s no trash.

And if your neighbor’s lawn is looking a little overgrown, be neighborly and offer to give them a mow too.

Be a Proud Owner

Pride of ownership is more than just a phrase used in marketing a home for sale.

It shows from front to back and top to bottom. It means all the details have been taken care of. The small things have been looked at and repaired. You show pride of ownership with an immaculate house.

Remove spider webs, weeds in the cracks of the walkway, deadhead the flowers, hide the dog food bowls, give the house a quick vacuum…whatever you can do to make it shine!

How well do you (and your realtor) know your neighborhood?

Prior to getting your home appraised it’s important to see what the nearby homes in your neighborhood are currently valued at. You did this before the house went on the market but some time has passed so take another look. The neighboring home values are what determines the value of your property.

Be sure to discuss any unusual circumstances with your realtor prior to your valuation. If you had a neighbor who moved quickly and sold his home abruptly for whatever reason it can impact your home valuation. If both you and your appraiser are well informed on what’s been happening in your neighborhood it will only help you.

So what is the appraiser looking at?

You’ve probably been preparing your house for sale for quite a while before it even went on the market and finding out you’re not done once it goes up for sale doesn’t make you feel warm and fuzzy; but keep in mind the appraisal is a crucial part of the sale not only going smoothly but going through at all.

A week before, or at least a few days before the appraiser arrives, do your own inspection. Make sure everything is clean and well organized. The house should be spotless, clutter free, smell good, and everything should be in working order. The appraiser is looking for specific things. Make sure you’ve taken care of these crucial items:

1. Smoke detectors and carbon monoxide detectors. There are specific guidelines for where these should be placed. Learn the specifics from the San Mateo County Association of Realtors.

2. The heater is in working condition, turns on and heats up quickly.

3. All the burners on the stove light and the oven is working properly.

4. All cracked windows are repaired.

5. Anything that may be considered unsafe has been repaired. Have a conversation with your realtor about this. You can also refer to your property inspection.

6. Provide the appraiser with a list of all of your upgrades.

How an Appraiser Will Calculate Your Home’s Value

In addition to how your house looks, its condition and appearance, the appraiser is going to look at data – a lot of data.

Residential property is evaluated by following what is known as the comparable (comps) sales price approach. Essentially an appraiser will use market data: size of your house, amenities, size of the lot, location, and condition compared to other houses that have recently sold in your neighborhood.

Appraisers try to use comparable sales that are as close to your property as possible. The further away both geography and in the time of the sale, the more inaccurate the results will be. The homes that they are using will be considered most similar to your home.

Appraisers will then make dollar adjustments based on the features and characteristics of the other comparable homes. For example, let’s say your home has three bedrooms and one bath. One of the comparable homes in the neighborhood is very similar in size to your home but has four bedrooms. The appraiser could use this property in the comparison but would need to adjust for the fact there was one more bedroom.

What If the Appraisal Is Too Low?

If the buyer has an appraisal contingency which states that they don’t have to buy the house if it doesn’t appraise for the offer price, your realtor is going to have to jump into action immediately.

There are three typical options:

1. The buyer could say never mind the appraisal, we’ll pay the difference between the appraisal and the purchase price in cash.

2. The buyer could quickly say never mind, we don’t have the cash to pay the difference so we can’t buy the house!

3. As the seller, you could say we will reduce the price of the house to the appraised price.

4. Or some combination of the above.

This is a really, really complicated situation. You cannot just say we don’t like that appraisal and get another one. It’s not that easy. And time is ticking on getting the house closed.

There’s undoubtably going to be more negotiation and sleepless nights.

Cost Does Not Equate to Value

Not every single improvement you make will bring up your home’s value. Understanding what will and what won’t – and how much – will help you determine where to invest your money.

Understanding effective economic return is very important when it comes to home value. Before you make huge expenditures simply in the name of increasing your home value do your research and talk to your realtor. The hot upgrades, materials, colors and fixtures change regularly.

The above real estate information, The above real estate information, Buying a Home? Put these Items on Your Must-Have List, was provided by Vicki Moore, a realtor specializing in home sales from Pacifica to Pescadero, including greater San Mateo County. 

Vicki can be reached via email at pacificalocals@gmail.com or by phone at 650-888-9268. Vicki has helped people move in and out of many San Mateo County homes for the last 25+ years. 

Are you thinking of making a move? I have a passion for real estate and love to talk about it! I service real estate sales in most San Mateo County cities and towns., was provided by Vicki Moore, a realtor specializing in home sales from Pacifica to Pescadero, including greater San Mateo County.