Need to refinance? Your lender may require a home appraisal before approving any changes in financing.
As a homeowner, you’ll obviously want to get the highest appraisal you can to ensure that you’re able to secure the amount of financing you need.
While you have no direct control over what the market says your home is worth, it is within your power to do everything you can to get the best appraisal possible.
How to prepare for a refinance appraisal
If an appraisal is needed, your lender will do so when you apply for a refinance. An appraiser will schedule a visit to your house, during which they will briefly inspect the property.
Keep in mind, an appraiser sent by the bank will be looking for flaws to determine what impact they will have on your home’s value, so make sure that the appraiser has access to every area of your home.
It’s important to repair obvious damages such as holes and to ensure that all household systems are in good repair. You can even give your home a fresh paint job if you choose, although signs of normal wear and tear should have minimal impact – if any – on the valuation.
Any attempts to hide damages will only work against you, and of course, be sure to remove any trash and/or clutter that can impede their assessment of your home.
Once he or she has finished their assessment, they will complete an appraisal report and deliver a copy to both you and your lender.
While appraisers are trained to look beyond aesthetics, they’re only human and at least on some level, a tidy and clean home will always reflect positively in their assessment.
What the appraiser is looking for
They will want to inspect the quality and condition of your home, your appliances, fixtures, floor coverings, countertops, and more when they arrive.
During the inspection, they’ll look for special features, any remodeling or updating, and if any obvious repairs need to be performed. Moreover, he or she may take photographs and measurements that will be used in the report.
It generally takes around 15 or so minutes for the appraiser to do their walk-through. Once they’ve assessed your home’s physical condition they’ll spend several hours looking for comparable sales and researching property data to complete the valuation.
What if the appraisal comes in low?
An appraiser files the report and you discover your house isn’t worth as much as you thought. Now what?
Check to make sure all information about your house is accurate in their report. Appraisers are human, after all, so it’s possible they entered the wrong data.
If you disagree with the report, you might consider seeking a second opinion. If decide to go this route, you’ll need to include some evidence why you believe the report is wrong.
For example, maybe there were some homes sold recently that should have been used as comparables or they failed to consider recent upgrades you’ve done. Keep in mind that if you want a second opinion you’ll be paying for another appraisal, so make sure the potential increase in value is offset by the costs you’ll incur.
Unfortunately, it’s not easy to successfully appeal a valuation so it might be worth it to shop around for a different lender and start the refinance process all over.
Bottom line, if you’ve already been proactive about maintaining your home, it will be very easy to prepare your home for a refinance appraisal.