Home Appraisals

There are any number of reasons why you might want to get a home appraisal. They can reduce your property taxes, aid in selling or buying a home, facilitate divorce proceedings, and enable home refinancing (including preventing foreclosure). Of course, depending on your circumstances, you may be hoping for a lower or higher home appraisal. Regardless, you should know a little about the process and how it works, both to decide if a home appraisal is in your best interest and to take any possible steps to influence the final appraisal number.

Home Appraisers
Given that home appraisals are often used by mortgage lenders, local governments, and real estate agencies, it should come as no surprise that these individuals go through a regulated licensing process. The Federal National Mortgage Association (FNMA) sets and maintains guidelines to help ensure a uniform appraisal process. That said, a home appraisal is essentially nothing more than an opinion about what your home and property is worth, albeit the opinion is supposed to be an objective one.

This is done primarily by looking at how comparable-sized homes are selling in your neighborhood. Generally, at least three of these comparable homes must be considered to generate a valid appraisal. Naturally, a home appraiser will adjust the final value for specific home improvements and the general condition of your home, but this home comparison starts the baseline value of your home.

Preparing Your Home for Appraisal
There is generally less that can be done to influence a home appraisal than most people think. Clutter and dirt has no effect on a home appraisal unless it has begun to affect the structural integrity of the house. Most home appraisers have seen it all when it comes to appraising a still furnished home, so there's no need to be embarrassed by your clutter. The most hideously painted walls, too, won't make a bit of difference. Neither will the most posh home furnishings.

On the other hand, the general condition of your floors and walls will have an impact on the value of your home. Fix any damage in the drywall; clean your floors to make them look as well-maintained as possible. If you're trying to get a higher home appraisal, make sure you have paperwork on any home improvement projects that aren't obvious. If the laminate flooring, for example, still has three years left on its installation warranty, show this to the home appraiser. Some general outdoor landscaping may also be in order, but otherwise don't spend a bunch of time or money on smaller items that won't have any bearing on your home appraisal.

Conducting Your Own Home Appraisal
While you can't guarantee what your home appraisal will be, doing your own research can help you predict where your appraisal may come in at. This can be useful in deciding whether hiring a home appraiser is worth the cost. If you're not at least in the ballpark of where the property value needs to be to refinance your home, it's probably best to save what money you do have. At the same time, know that mortgage brokers may pressure the home appraiser to overprice the home to get a larger loan amount. In the rare circumstance that an appraisal needs to be challenged, doing your own research can also help your cause.

At the same time, if you're getting your home appraised to sell it yourself, you'll want to let the appraiser know this. Typically, home appraisers run to real estate agencies to get their home comparisons. If you can tell the home appraiser specifically what other homes have sold for in your area, that's even better. As objective as the process is supposed to be, these factors can have a dramatic effect on the final value the appraiser reaches.