When the appraiser comes back with a lower amount than you expected, it can be a bit shocking. It’s better to know in advance what commonly causes an appraisal to come back on the low end so that you can do whatever is needed to help ensure your house gets the right numbers. Some things may be out of your hands, but there are things you can be aware of as the process begins.
Reason One – Emotions vs. Amount Paid
There are times when the tide of emotions run high and you end up putting a bigger price on your house than what it’s worth. Or, maybe the buyer is determined to get the house, whatever the cost, and places an offer that is too high. Either way, your house’s value is not based on how wonderful it is or how much it’s loved. The appraiser will look at the actual value of the house in today’s market without consideration to emotions that may have impacted the price up to that point.
Reason Two – Quick Market Increases
The desire for homes in your area may have increased dramatically over a short period of time. This could throw things off a bit for the appraiser who is relying on the past references that may not include this recent increase in value. If this happens, you could ask the appraiser for an adjustment. They may or may not do this for you, but it doesn’t hurt to ask.
Reason Three – The Square Footage Factor
Let’s say that you are selling your condo, and you recently renovated things and installed a gourmet kitchen that any chef would be proud to use. Unfortunately, the condos in your area, without those improvements, are selling according to their square footage — and do is yours. These improvements may not override the square footage factor when compared to other condos in the area. Again, you can ask for an adjustment, but this is to the discretion of the appraiser.
Reason Four – Comparisons
Your landscaping and spa may have cost you a pretty penny, but they won’t necessarily impact the value of your home in the grand way you envision. If there are three other homes in your area with spas, the appraiser will judge your home with theirs using the same standards. This means that you may have a top of the line spa that you paid thousands of dollars more for than did your neighbors, but it won’t make a difference in the appraisal.
Reason Five – Missed Opportunities
Now, this is one area that you may be able to have the most control over when it comes to making a difference. The appraiser may not know that you have an amazing view from one side of your house, or that your house is facing a favored direction. Don’t be afraid to bring up things like this that could have an impact on the overall appraisal. This could be important if your house is the only one in the neighborhood with an unobstructed view that adds value. It’s a good idea to put together a list of things that you’ve improved or updated, and make this list available to the appraiser.
Reason Six – The Wrong Appraiser
No one wants to talk about it but there are instances where the appraiser just doesn’t have the experience or doesn’t do a good job. This is why it’s important to have a reputable, professional appraiser do the job. You want someone with a proven track record that is honest, fair, and does a thorough job when they come to appraise the house. Unfortunately, you may not have a say in who the appraiser is that visits your house because it’s typically paid for by the buyer’s lender. However, you can ask to accompany the appraiser as they make their assessments.
If the appraisal does come in on the low side, your real estate agent can best instruct you on how to proceed. Remember, you don’t have to go through the home selling process alone. Give Kathie Moore a call today at 651-351-4736 to discuss how she can help in the sale of your house.