Tips for sellers looking to maximize their home’s appraisal value.
Selling your home can be an exciting yet challenging process, especially when it comes to navigating the hurdles that can impact the sale price. Two crucial factors to be aware of during this process are home inspections and appraisals.
What is an appraisal, and why is it important? When selling a home, the buyer’s bank or lender typically sends out an appraiser to evaluate the property and ensure that its value aligns with the agreed purchase price. If the appraisal comes in lower than expected, it can cause complications. The bank may decline to lend the full purchase amount, requiring the buyer to make up the difference in cash, or you, as the seller, may need to lower the price. This situation often calls for negotiation to find a mutually agreeable solution.
“If the appraisal comes in lower than expected, it can cause complications.”
Why do appraisals sometimes fall short? Appraisals are based on historical data, looking at previous sales and comparable properties (comps) in the area. However, the real estate market is forward-looking and constantly changing. Therefore, appraisals may not accurately reflect the current market conditions. This discrepancy can lead to lower-than-expected appraisals, frustrating both buyers and sellers.
To tackle this challenge, it is crucial to work with a knowledgeable real estate agent who understands how appraisals work. An experienced agent can collaborate with you and the appraiser to create an “appraisal package.” This package aims to highlight the value and improvements you have made to your home.
Why are upgrades important? Upgrades significantly impact the value of a property. For example, if you recently installed a new air conditioning unit, it adds value to the appraiser’s assessment. However, if your agent fails to communicate these upgrades to the appraiser, they may not fully recognize or consider them, resulting in a lower appraisal value.
When selecting an agent or preparing to sell your home, make sure to thoroughly outline all the upgrades and enhancements you’ve made. It is essential that your agent effectively communicates this information to the appraiser. By doing so, you can ensure that your home is valued properly, despite the backward-looking nature of appraisals.
If you have any questions, please don’t hesitate to reach out to me by phone or email!
