One of the first things you need to do when you are planning to sell or refinance is to get a home appraisal. An appraisal helps you establish the market value of your property, which determines how much home equity you have available. An accurate appraisal can help you get the best mortgage rates (if you're refinancing) or form realistic expectations about the price of your home (if you're selling).
Five Steps to Boost Your Home's Appraised Value
Here are five ways to help you get the highest value on your home appraisal prior to a mortgage refinance or home sale:
1. Make sure that your place is presentable.
Prepare your home for a good impression before the appraiser arrives for the evaluation. Check your plumbing for leaking pipes and make basic, low-cost changes (now's the time to replace that broken doorknob you never got around to). Your home should be bright with lights. You might even turn on all the interior lights just to achieve this effect.
Your home must be free of eyesores---strewn laundry, dirty dishes, or full gargage cans---and smell good. Make it inviting and welcoming by putting plants or flowers at the door. A well-manicured yard will also add points. Remember that an appraiser will evaluate your house the way a buyer does.
2. Do your homework on neighborhood comparables for your appraiser.
The value of the homes in your neighborhood affects the value of your home as well, so do a little research on the recent sales prices of houses comparable to yours. Although it is the task of the appraiser to investigate the circumstances behind the sales prices in your neighborhood, a little information from you will be appreciated. Just don't overdo it or be too pushy.
3. Point out the best attributes of your home.
Many appraisers don't have all the time in the world to inspect every inch of your house, so provide your appraiser with a list of your home's best attributes before he or she begins research. This can include certain home improvements, unique advantages of your location, and the benefits of living in your neighborhood. If you have made any permitted additions or upgrades that distinguish your home from your neighbors', let the appraiser know.
4. Ask your real estate agent to be present during the appraisal.
Your agent works in the business day in and day out, and an experienced agent can be the best representative to answer your appraiser's questions or concerns regarding your property.
5. Cooperate with the appraiser--your mortgage rate or sales price is on the line.
It shouldn't matter, but it does--a cooperative owner makes a much more favorable impression to an appraiser. Even if you are uncomfortable with the thought of a stranger doing an inspection of your home, be unfailingly polite.
Once the appraisal is complete, you will know the likely price of your home when it is offered to the real estate market or the value your mortgage lender will use in determining your refinance rate. If you feel that the first appraisal is not satisfactory, you may request a second appraisal. If this is the case, try another appraisal company that may use a different methodology--which may result in the boost you need for a better mortgage rate or sales price.