How sellers can “pass” their appraisal
How does the appraisal process work and what influences it?
If you’re selling your home, here are insights you can use to get a fair, informed appraisal for your property.
What does an appraiser do?
In short, an appraiser determines the current value of a property. They do this by performing a walk-through of the interior and exterior of the property and making note of any amenities such as a finished basement. They will also note health and safety code violations or other areas of concern. Most appraisers will utilize comparable home data (often referred to as comps) of nearby recent sales and neighborhood statistics to help determine a home’s value.
Understanding an appraiser’s work style
Since appraisers are independent contractors (hired by the lender and typically billed back to the buyer), it’s important to understand that they have their own preferences and work styles. While they are on your property, it’s essential to allow them one to two hours to complete the inspection without interruption. However, there are things you can do to make the appraiser’s job easier — and help your home get an accurate valuation.
How can the seller help?
- Make sure all utilities are on
- Ensure spaces and mechanicals are clean, functioning and free of debris
- Replace burned out lights and make needed repairs
- Make sure crawl spaces, attics and outbuildings are accessible
What happens if the home doesn’t appraise?
If a property appraises under the sales price, your options will then be:
- Request a reconsideration of value. Although unlikely, it’s possible that the appraisal could be reconsidered and you could still close at the price agreed upon by you and the buyer
- Ask the buyer to pay more than the appraisal by increasing their downpayment
- Renegotiate the contract, by dropping the contract price to the appraised price
What happens if the home appraises?
Hooray, your property appraised at the sales price! All systems are go and you’re on your way to the closing table. Now the buyer’s financial and credit history will be verified, the lender will approve the home mortgage loan and the loan package will be submitted to the title company to prepare the documents for closing.