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Short Summary
Main recommendation: Prepare for a home appraisal by fixing structural and maintenance issues, pricing the home correctly, keeping a list of dated improvements with costs, and ensuring the house is clean and easy to access. The appraiser assesses five areas (exterior, size, interior condition, improvements, and features/amenities) and values the home mainly through the comparable sales approach using recent, like-kind sales.
Key Points
- Exterior review covers the foundation, walls, roof, and workmanship; health and safety conditions and any roof holes should be repaired, and settling cracks should be disclosed or repaired.
- Square footage is verified by the appraiser, not just taken from listing claims, and is used to calculate price per square foot, which is then multiplied by total square footage.
- Comparable sales use comparable homes sold within about three months (no more than six), typically within five to ten percent of square footage, and adjusted for differences such as bedroom count.
- If an appraisal comes in low, the listing agent should check it for errors, request a reconsideration of value with the best comparables, and then renegotiate (price drop, buyer paying the gap, or splitting the difference), since a buyer cannot borrow more than the appraised value.
- Over-improving for the neighborhood can backfire, so renovations should match the area.
Details Worth Noting
- Concrete instructions:
- Repair any roof hole and any foundation issues before listing, and disclose foundation problems upfront.
- If you have settling cracks, disclose them and, if possible, fix and repaint them.
- Repair or replace anything needing service on the roof, and fix items the buyer requested in their repair request.
- Keep a written list of improvements with the date completed, the project type, and the cost.
- Have the listing agent prepare a Comparative Market Analysis with the comparables used to set the price, and make it available to the appraiser.
- Clean the house, make it fresh and easy to access, and maintain landscaping for curb appeal.
- Before the appraisal, ask the appraiser whether they want the listing agent present; if not, offer to email the CMA and improvement list.
- If the appraisal is low, have the listing agent verify its details and comparables, then request a reconsideration of value.
- Appraisers look at specific interior components: windows, doors, flooring, walls, plumbing, electrical, kitchen, and bathrooms, checking that everything is operable and well maintained.
- Improvements that add value include flooring, kitchen or bathroom remodels, and HVAC replacement; amenities such as an enclosed pool or built-in barbecue stub are also adjusted in value.
- Assessed value is only used by the municipality to set property tax rates, not as the appraised or market value; Zillow estimates are not what appraisers use.
Bottom Line
A smooth appraisal depends on preparation: well-maintained, accurately priced, and documented homes give appraisers fewer reasons to scrutinize value.
