Home Appraisal Tips: Here’s How You Can Prepare

Published on November 9, 2017

– 6 min read

A home appraisal is a key step in both the home buying and refinancing process.

We want you to be well-prepared whether you’re buying or refinancing, so we gathered some essential home appraisal tips to make the process easy for you.

Refinance appraisal vs. purchase appraisal

If you’re buying a home, you want the appraisal to be equal or above the accepted purchase price so you don’t have to adjust the loan amount or come up with extra cash. Otherwise, your deal may fall through.

When you’re refinancing, your home value is also important. If it doesn’t appraise for the value you expect, there may not be a net-tangible benefit to refinancing. Or, if you’re doing a cash-out refinance, you may not be able to draw the amount out you want.

Given how high the stakes can be, we want you (or the seller) to be well prepared for a visit from the appraiser. Minor items can end up costing time and money. A re-inspection fee costs usually costs about $100, but you may need to pay for a 2nd appraisal which could be anywhere from $450-800. There also could also be financial penalties for extending a rate lock if a re-inspection delays closing.

Check out these home appraisal tips to help avoid the cost and hassle of a second appraisal trip or worse.

What do home appraisers look for?

As part of the appraisal process, appraisers look for safety hazards on the property. Knowing what those hazards are and addressing them ahead of time is crucial to avoiding a re-inspection. Here are the big six to-do’s that homeowners often miss.

1. Install Smoke Alarms
Install working smoke alarms in bedrooms, and make sure each floor has one. Something as small as a dead battery could cost you hundreds.

2. Get Carbon Monoxide Detectors
Make sure you have working CO detectors on every floor (including basements). These inexpensive devices, when installed with fresh batteries, can make all the difference in getting the appraised home value you want.

3. Double Strap Your Water Heater
Double strapping your water heater is an important one, and is also required by California state law for earthquake safety. Make sure you have time to head to the hardware store or call a handy-person to do the work for you before the appraiser visits.

4. Ensure the Property’s Water is in Working Order
All sinks should have faucets installed and all showers should have shower heads.The water should be turned on and in working order throughout the home. If the property contains an in-ground swimming pool, it should be filled with water (an empty pool is a safety hazard).

5. Make Sure the Property’s Electricity is Safe and Sound
Electricity should be turned on and in working order in all rooms. Switch plates should be installed on all light switches and plugs. Finally, there should be no visible bare wires inside or outside of the house and property. A $.25 light switch plate or inexpensive lighting cap could cost you big bucks if missing.

6. Keep Clean!
A tidy home can help make a good impression on the appraiser. Make sure it’s looking its best – both inside and out. A clean home lends to the impression that a home has been well taken care of and is in good working condition. Little touches can translate to big bucks on your home’s overall appraisal value.

Last word: appraisal management companies

Since 2010, lenders have been required to use an intermediary appraisal management company to blindly select an appraiser. This “firewall” helps appraisers be objective about home values. You will pay the lender an appraisal fee directly, but it is a 3rd party cost that goes entirely to the appraisal management company and the appraiser — not the lender.

The bottom line? Home value appraisal is a key part of buying homes and refinancing and it pays to be prepared.

If you have more questions about the appraisal process, chat with one of our licensed Loan Specialists. If you’re ready to get pre-approved or refinance, you can see your rates in about 3 minutes completely online.

Steven Fung
Steven Fung is a licensed Loan Specialist at Clara with over 17 years of experience. When he doesn’t have his mortgage hat on, he enjoys repairing old cars and working on home improvement projects.
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