Appraisals – Real life in Madison WI Real Estate
We had a listing with an accepted offer of $157,000. One week prior to closing we had to amend the price to $155,000 because that is what the appraisal came in at. Result: a successful closing. Sellers were prepared for potential issues with appraisals and accepted the position they were in to adjust the price. Buyer was happy. Sellers were happy that it didn’t kill the deal.
We worked with a buyer on a foreclosure that had an accepted offer of $155,000 – the appraisal came in at $172,000. Result: a successful closing. Happy buyers. I’m not sure the bank cared.
One of our listings got an accepted offer for $274,000. It was appraised at $258,000. Result: that appraisal killed the deal. Unhappy Buyers. Unhappy Sellers.
We are in a different market. Prepare yourself and your home properly!
10 Ways to Prepare Your Home for an Appraisal:
1. You only get ONE chance with the appraiser. Make sure your home is ready because not only are first impressions important, but the appraisal can affect the outcome of your sale. Take this part of the home selling process very seriously. 2. Get your home in good condition. Be sure to trim the lawn, clean out and garage, repair cracked windows or torn screens, check for leaky faucets and secure gutters and down spouts before your appraisal. Basically get your home in the best showing condition you can. No longer are the days of drive by appraisals. FHA appraisers have to complete a different set of inspection forms and if there is chipping paint, missing handrails or evidence of pests (for example), the lender may require repairs done to comply with the FHA lending regulations. Not all repair items are part of inspections – some items come up as part of financing requirements with FHA loans. Talk to your agent about what to expect. 3. Get organized. Put together a checklist that will help you get ready for your appraisal. 4. Be flexible when scheduling the appointment. Don’t delay it. Work with their schedule. 5. The appraiser will need approximately 30 minutes to one hour to complete the inspection phase of the appraisal process, which includes: exterior photos of the front and rear of the home and a photo of the street in front of the property; measurements of the exterior of the home, garage and any outbuildings; a walk-through inspection of all rooms and levels of the interior of the home, including the basement. 6. Provide marketing materials and list of improvements. If your Real Estate Agent has a booklet with information about ages and dates of mechanicals, appliances and any features that add value to the home, please leave that information out for the appraiser to review. Don’t make them guess how old the roof is. 7. Point out any amenities that may not be obvious to the appraiser: sprinkler systems, radiant floor heating, security systems, built-in vacuum, energy efficient and green features. 8. Allow your appraiser access to the entire property, including access to any crawl space or attic areas. This is specifically important for FHA appraisals. 9. Provide a copy of last year’s tax assessment information. 10. The first thing appraisers look for is comparables, so be prepared and have a list of recent sales of similar properties in the immediate neighborhood. You shouldn’t have to provide this to the appraiser, that is their job. However, you can prepare yourself by asking your real estate agent to show you at least 4 or 5 comparables that are similar in style, proximity, square footage, age and number of bedrooms. Finding comparables is a balance in science and art.
Following these steps will go a long way toward making the home appraisal process a bit easier. For more information on the appraisal process and preparing your home for sale, please contact Sara and feel free to forward these tips to your family and friends.