Ready to Sell

Understanding Appraisals

outofstyleLet’s face it, right now we appear to be in a market where the home inventory is not that large and we really need to make sure if we are selling our home, we have some basic knowledge on why an appraisal could come in low.  As a seller you want to take advantage of the lower inventory, which could allow you to make more money on your home.  A couple things to pay attention to on the whole appraisal process:

  1.  You have to keep your home fairly cleaned up when the appraiser comes.  He is really looking at the “guts” of the home, however if you have a disaster area, that could affect some things if they are comparing your home to the other “guys” cleaner home.
  2. Not applicable to most AZ homes, but appraisers are not calculating the basement square footage the same as the main home.  So if you do have a basement, and you really put some money into it, you could be in for a surprise on how much value you DON’T get out of it compared to what you put in the basement.
  3. One of the most common issues with selling your home is the fact that you always think your home is better than maybe it really is.  However, when an appraiser goes and looks at comparable homes in the area, they might compare the home to a similar home (as it appears on the surface) but in reality the home has issues so it sold alot lower than you think your home is worth.  Zillow won’t tell you that when you are doing your own research, and an appraiser would have to speak with the listing agent to find out if there was a particular reason a similar home sold for a lot less.
  4. All these beautiful home improvements you have been doing to your home in the last few years, you are generally not going to get that back dollar for dollar.  There are certain things you can do to your home that will boost your home’s value.  Take a look here
  5. In a seller’s market, the inventory is low and homes are selling fast.  Being able to use a comparable that is currently under contract, versus a little older comps, can certainly help with getting the value you need on your home, because that newer comp is more indicative of today’s going price.
  6. Don’t have the most expensive home on the block or the area.  A appraiser can really have a hard time if their ability to pull comparables is limited to comparing your home to a home that is far under par than yours.
  7. Word(s) of the day:  functional obsolescence-  how many of you have walked in a home and there was something very very odd about the set up of the home for one reason or another.  For example- not having a bathroom on the main floor of a two story home, having to walk through one bedroom to get to another or a 4000 square foot home only having one bathroom.  These sorts of things the appraiser will most likely ding you on in putting a value on your home.
  8. Some are really really into having a good view.  You are now trying to sell that good view home, but the appraiser is not giving you think that view is worth.  Unfortunately, with having a good view it is not necessarily going to be easy to find compareables so the appraiser maybe slights you on what you think that view is worth.

Bottom line- do your research like you are doing on the internet, but keep in mind working with a real estate agent is a good idea when wanting to know things such as recommendations on getting a better appraisal, decorating, pricing, etc.