How To Prepare For Your Home Appraisal

So you have finally found your dream home and made an offer or maybe you want to do a home loan refinance before rates go back up. Both will require an home appraisal. But new Fannie Mae home loan appraisal guidelines may cause you problems.

Normally, the appraisal person comes, does the home appraisal measuring to confirm the footage & size and taking photos. He goes off and finds similar comparable homes that have sold recently to use as appraisal comps.

The appraiser makes adjustments to the home value based on the Comps. Maybe you have a pool and the Comp does not. He can still use the Comp but just adds value to your home to account for the pool. Other adjustments are made and the appraisal is issued.

Value Comes In Low

The big surprise…the value is way below the purchase price or amount needed to do the home loan refinance.What can you do? Back up to the beginning…did you prepare correctly for the Appraisal or did you just answer the door and let the Appraiser in?

You have to make a good impression. The appraiser will view your property and then decide which comps in the area are similar to yours. As an example, let’s say you had weeds growing 5 foot tall in the front hard.The appraiser won’t necessarily find others with the same. But they might not use a pristine home that just sold for top dollar either.

Treat the appraisal as showing off you home in it’s very best viewing. Do the necessary cleaning and organize things. Get the windows washed and go buy some fresh flowers to sit on the counter.

Appealing an Appraisal

Yes, you can get your mortgage professional to appeal the appraisal value given, but good luck. To appeal, you must provide Comps to support your appeal. Immediately, most will go find homes that sold for a higher price and use those. A home appraisal is a mix of all homes and most of the time represents the worst case example …not the best.

If you find similar homes that sold for more, be sure and don’t find similar homes that sold for less.

New Second Appraisal

Unfortunately, you can’t just keep getting new appraisals until you get the value you are looking to get. Each situation is different. Discuss it with your mortgage lender and see if a 2nd one can be done. Remember, you will have to pay for another one.

We recently saw a homeowner who was doing a mortgage refinance Santa Clarita get 3 appraisals and each one came in lower.Then right down the street, another had bought a new home and was getting a FHA home loan Santa Clarita and the appraisal came in 20% higher that anticipated. Prepare for the appraiser is the key.