A key part of buying or selling a house, a home appraisal is an independent, unbiased assessment of how much a property is worth. Conducted by a licensed or certified professional, an appraisal typically is based on comparable sales in the neighborhood and market as well as a visual inspection of the condition of the home. Appraisals are necessary when buying and selling a home because banks won’t lend money if the appraised value of the house is less than the loan amount. However, there are other times when an appraisal may be required or can help save you money. Homeowners considering putting their house on the market can have a pre-listing appraisal conducted to get a better sense of the market value of the home. Doing so can help determine a realistic asking price, increasing the likelihood of a fast sale. When you refinance your home, you’re actually replacing your old mortgage with a new one because your home’s value may have changed since you first bought it. For that reason, lenders will require an appraisal to ensure the new mortgage amount can be justified by what the house is worth today. If the home’s value has increased since it was purchased, you may be able to get cash out as part of refinancing. However, if it has declined, you may have difficulty securing a new loan. Unlike refinancing, home equity loansare a second loan on top of the existing mortgage. The amount you can borrow in a home equity loan is based largely on the amount of equity you have after the remaining value of the mortgage is subtracted from the current value of the house. If your home has decreased in value, you may not be eligible for a home equity loan. Other types of loans, including cash and business loans, may require you to use your home as a source of collateral. As with home equity loans, the bank will want to make sure the money it lends is supported by the current value of your property. In many states, property taxes are calculated based on the fair market value of your home. If the value of your home listed on your property tax bill appears too high—if housing prices in your neighborhood or city have declined, for example—you may be able to appeal the assessment. An independent appraisal could help strengthen your case, which ultimately could lower your annual property tax. The process for challenging assessments varies by state and locality, so be sure to check whether your state or locality allows homeowners to submit their own appraisals when appealing property tax assessments. Consider providing information that helps the appraiser make an accurate estimate of the home’s value. Gather information about the sales prices of nearby homes and details about your property and neighborhood that may not be readily apparent—such as a larger lot or a new school within walking distance. Keeping records of home maintenance and improvement projects can also help make the case that you have a well-cared-for house. Keep in mind that you’re unlikely to recoup the full cost of a major renovation, such as a kitchen or bath remodeling, in the appraised value of your home. As with selling a house, improving its overall appearance can make a difference when the appraiser comes to conduct his or her inspection. Make sure the lawn is mowed and the house isn’t cluttered or messy. Consider painting or other repairs if the interior or exterior is dingy or showing signs of neglect. To learn more about getting the most out of your home, visit the Nationwide Learning Center Home Resources section. Also, click here to learn more about the home appraisal process.
1. Before selling your house
2. Refinancing your home
3. Getting a home equity loan
4. Applying for other loans
5. Appealing tax assessments
Get the most out of your appraisal
FAQs
5 Other Reasons for a Home Appraisal - Nationwide? ›
For a lender to fund your new purchase, refinance, or home equity loan, it will require an appraisal to assist in determining the value of your property as collateral against the loan. Your lender will typically order the appraisal, and you will pay the cost of the appraisal as part of the financing process.
What is the reason for obtaining an appraisal? ›For a lender to fund your new purchase, refinance, or home equity loan, it will require an appraisal to assist in determining the value of your property as collateral against the loan. Your lender will typically order the appraisal, and you will pay the cost of the appraisal as part of the financing process.
What are the most important factors in a home appraisal? ›When evaluating your home, appraisers consider several factors such as the general condition of the house, its location, age, size, condition, and any home improvements made to it. These factors can have a significant impact on the overall value of the property.
What are some of the key factors used to determine the final appraisal? ›Most real estate appraisers use a Comparative Market Analysis, or CMA, to compare your home to recently sold homes in the area. Size, type of house, number of rooms, garage or no garage, and square footage are some of the elements used for comparison.
How do I get the most value out of my appraisal? ›- Basic yard care. Though it's not at the top of their list, curb appeal does play a role in how an appraiser values a home. ...
- Fresh paint. ...
- Install new garage door. ...
- Spruce up front door and porch. ...
- Kitchen and/or bathroom update. ...
- Freshen up walls. ...
- Make minor repairs. ...
- Install shutters.
Appraisal systems exist to improve organisational efficiency by ensuring that individuals perform to the best of their ability, develop their potential, and earn appropriate reward. This in turn leads to improved organisational performance.
What are four benefits of appraisal? ›Performance appraisals help managers and employees align their priorities and brainstorm together. Frequent meetings can build relationships and make the manager appear more approachable. Peer reviews help individuals see how their coworkers appreciate them.
What not to say to an appraiser? ›- I'll be happy as long as it appraises for at least the sales price.
- Do your best to get the value as high as possible.
- The market has been “on fire”. ...
- Is it going to come in at “value”?
The short answer is “no, a messy home should not affect the outcome of an appraisal.” However, it's good to be aware that there are circ*mstances in which the state of your home can negatively affect its value. Let's go over what appraisals entail and what factors can influence them.
What increases appraisal value the most? ›- Mow and clean up your yard. ...
- Examine the exterior of your home. ...
- Document all of your home upgrades. ...
- Give your home a deep cleaning. ...
- Patch up any imperfections. ...
- Let the appraiser do their job. ...
- Be open to the appraiser's questions. ...
- Do your own comparisons.
Do home appraisers care about cleanliness? ›
Your Home. The appraisal professional who performs your appraisal is not concerned with whether or not your dishes are done, or your laundry is put away – these things don't affect the value of your home, and the value of your home is what an appraisal is all about.
What happens if an appraisal is lower than an offer? ›The home appraisal provides a snapshot of the appraiser's opinion of the current market value based on similar closed sales in the area. When the appraised value comes in below the contract price, it limits the amount a lender will finance because they base the loan on the appraisal.
What are the three main factors to consider in the phase of appraisal? ›- Business Impact: The first context is the impact of the employee's work on the organization's business goals. ...
- Teamwork: The second context is how well the employee works with others.
Deep Clean Like Never Before
Having your home sparkling clean will surely impress a home appraiser! Everyone prefers a clean and tidy home. So do yourself and the appraiser a favor and make sure you give your home a thorough cleaning before the appraiser comes.
You can do this by knowing the local market better than anyone else. Familiarise yourself with the last 30 sales in the same area as the property you are appraising. Work out the median number of days to sell, average sale price and average price compared to rateable value or government valuation if applicable.
What negatively affects home appraisals? ›Updating appliances or any major systems, like plumbing, electrical or HVAC, can be costly. If yours are outdated, it could affect the overall value of the home. If the interior hasn't been changed for decades, it may not appeal to buyers, which can also cause the value to decrease.
What is the primary purpose of an appraisal? ›A lender uses an appraisal not only to assess the value of the property, but also to determine such things as your interest rate, required down payment, and whether you will be approved for the loan.
Why is it important to have an appraisal? ›To make sure employees are working to the required standard. To gauge which employees are performing the best and therefore eligible for bonuses, pay rises and other rewards. To address performance issues where necessary.
Why would a buyer not want an appraisal? ›An in-person appraisal can also slow down a home sale, especially if an appraiser determines that a home is worth less than the amount a buyer has agreed to pay for it. For these reasons, some buyers ask for an appraisal waiver, which would allow them to purchase a home without a formal appraisal.