Home Appraisal Tips

Here are some important home appraisal tips that I've acquired from buying and selling multiple homes.

A Proffessional Appraisal is a Must

If you’re going to sell your house yourself, you should get a professional appraisal done. Ouch, more money out of your pocket! I can just hear all the husbands complaining at this point!

But we’re not talking thousands of dollars. Appraisal fees range from $100 to $400 and is money wisely spent.

As a FSBO seller, having a certified appraiser value your home ranks up there with providing a home inspection. You erase a potential buyer’s worry that he’’s paying too much and you cementhis confidence in your integrity.

There is another more tangible benefit of having your home appraised professionally before you settle on an asking price.

Consider this scenario:

You advertise your home at what you believe it is worth and find a buyer who writes up an offer. Then he tries to arrange financing and discovers that the mortgage company will only lend him money based on a price below what he has offered – the price set by its appraiser. Now an ugly scene unfolds. Either he will walk away from the deal because his offer was conditional on being able to get the financing or he will angrily demand a lower price –accusing you of ripping him off. Is’n’t theappraisal fee a paltry price to pay to ensure you are not caught in this situation?

So, sure. You could get by without a professional appraisal. But, by appraising your home before you begin advertising, you’ll be better positioned to negotiate a sale closer to your asking price, and the buyer won’t run into any trouble when securing a mortgage.

But, Beware the Low-Ball Appraisal

One of the best home appraisal tips I could give, is to be aware of the fact that appraisers often deliver a price below what the homeowner believes, or even knows, her home is worth.

Appraisers have to be cautious to avoid a potential legal suit by quoting an unrealistically high figure. The lender will hold the appraiser liable if the mortgagee defaults and the lender can’t sell the house for enough to recoup the mortgage money still owing. By low-balling the value, appraisers are building in a safety net.

How to Ensure a Fair Appraisal

There are two things you can do to ensure the appraiser comes in at a realistic price for your home:

First, follow him as he walks through your home and make sure he records every upgrade. Point out in detail each unique feature that makes your property special and pay close attention to what notes he’s making. Don’t be shy. The more you can tell him, the closer he can come to a price that accurately reflects the quality of your home. Second, if he still comes in with what you honestly feel is a low-ball number, ask him to review his findings with you. How did he price your home, compared to others on the market? Tour those houses yourself to confirm he rated your home accurately. If he missed something meaningful, let him know.

This exercise is worth doing because if your home is going to be appraised at a lower price than what you intend to list it for, it’s better to find out now when you have an opportunity to do something about it rather than later when the potential buyer applies for a mortgage and it’s out of your hands.

Take Your Appraisal to a Financer

Once you have an appraisal, take it to a mortgage broker or mortgage specialist at your bank.

Explain that your home is FSBO. Would the lending institutions he deals with accept the formal appraisal you have in hand? If he says yes, you have another strong card in your hand come negotiating time.

You have saved the buyer the appraisal fee.

You could also ask those who arrange financing if they would be willing to pre-approve a buyer who wants to write up an offer. They will be delighted; you might bring them new business. You cannot guarantee that a lender will accept the professional appraisal you have had done.

The lender may insist on an independent appraisal that the buyer must pay for.

More Home Appraisal Tips:

The Best Free House Appraisal - How to appraise your home online

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