In most cases, you’ll need to have an appraisal done on your property before you sell your home. Most cash buyers want to know the current value of the home they’re buying, so they’ll opt for a home appraisal.
Buyers who need a home mortgage are required to have the home they’re purchasing appraised. The lender will only issue loans for homes that appraise at or above the offer price for your home.
5 Steps to Do an Appraisal on a Home
An appraisal provides an unbiased and accurate assessment of your property's worth, taking into account various factors such as location, size, condition, and recent comparable sales in the area. To ensure a smooth and successful appraisal, there are several steps you can follow to prepare your house and maximize its value.
Step 1: Understand the Basics of Home Appraisal Value
Home appraisers will look through the entirety of your home when conducting an appraisal. Some important factors that appraisers consider are the age of major appliances, windows and roofing. The appraiser will identify unique features of your home and add additional value to your home accordingly.
Once the appraiser has gone through your home, they’ll conduct a market analysis to determine the value of your home. Appraisers will look at past listings in your area, and compare the features of your home to those that have sold in the past year.
Step 2: Gather Information About Your House
A lot of factors go into determining the value of your home, so making a spreadsheet with the most important statistics about your property can be helpful for you to compare your home’s value to similar properties.
Some important benchmarks to use when comparing your home to other listings are the number of bedrooms, number of bathrooms, square footage and lot size. While this isn’t comprehensive, these factors often contribute the most to your home’s value.
Step 3: Compare Other Home Prices
Once you’ve gathered information about your house and similar properties in the area, you can compare your home to these other listings to estimate the value of your home. Make sure that all the data you collected is of recent sales or pending listings, as the real estate market can change quickly.
When comparing your property to other homes in your area, you should consider what makes your home more or less valuable than the other homes you’re comparing to. Bedrooms and bathrooms can increase the value of your home, but so can unique aspects like the location of your home within the neighborhood.
Typically, more secluded homes in neighborhoods are more desirable, as there is less noise pollution and more privacy.
Step 4: Get Help Valuing Your Home
There are lots of free online tools you can use to help find your home’s value. While many websites aren’t that accurate, the more information you provide to the website about your home, the more accurate the estimate should be. Websites like HomeLight take many factors into consideration when valuing your home, so their home value tool is a good bet.
To truly find the market value or appraised value of your home, you’ll need to talk with a licensed professional. A real estate agent can help give you insight to your home’s current market value, and a home appraiser can find your home’s appraised value.
Step 5: Get an Estimate
If you want to get a free home estimate, HomeLight can estimate your home’s value in a matter of minutes. HomeLight offers a better way to estimate your home’s value, as it uses additional information to give a more accurate estimate of your home’s value. HomeLight is a great place to start to get an idea of a baseline value for your home, so you can compare what your realtor values your home at versus the value HomeLight gives you.
How to Improve Your Home Appraisal Value
There are certainly ways you can improve your home’s value before listing it on the market. Of the improvements you can do, bathroom and kitchen renovations are the most important. These improvements will increase the value of your home more than other renovations, as the kitchen and bathrooms are some of the most important features buyers look for in a home.
You can also make your home more marketable through home simple improvements, even if the improvements don’t directly increase the value of your property. The easiest and most effective way to improve your home’s value is by painting your walls a color that’s in style. Right now, light greys and pastels are in, so consider using these colors to appeal to as many buyers as possible.
Home Appraisal vs Market Value
Your home’s appraised value isn’t always the same as your home’s market value. The appraised value of your home is decided by an appraiser. The appraiser uses past sales and statistics to determine your property value, but they typically don’t factor in local market conditions. To understand the market value of your home, it’s best to talk with your realtor.
Real estate agents can better predict the market value of your home, as they’re knowledgeable on the current housing market in your area. If there isn’t much inventory or your home is in a particularly desirable location, then your property may sell well above the appraised value. If there’s an influx of listings in your area and not enough buyers, then your home may sell below the appraised value.
Legal Information for Home Appraisal Value
Home appraisals need to be done by licensed professionals, and it’s one of the most important parts of the home closing process. Most buyers need an appraisal to secure a mortgage for the home, so if the appraisal comes in low then it may cause problems for the buyer and seller.
For example, if a buyer submits a preapproved offer for your home, offering $300,000, the bank will only issue this loan if the appraised value is at or above $300,000. If the appraisal says your home is only worth $295,000, then your realtor will need to negotiate with the buyer’s agent to decide who will pay the $5,000 difference.
The difference between the appraised value and the sale price of the home is split between the buyer and seller, but the seller will have more leverage if there aren’t many homes available on the market.
Best Home Appraisal Sites
Home appraisal websites can give you an idea of what your home is worth before you list your home on the market. While these websites aren’t always accurate, they can be a good baseline before you talk with an appraiser or realtor.
If your home estimate on these websites deviates a lot from what your realtor thinks your home is worth, you can ask them their reasoning behind their valuation of your home –– this can give you an idea of unique aspects of your property you may have missed.
HomeLight
HomeLight can give you a more accurate home estimate than other websites, as it uses additional information to value your home. To find your home’s value on HomeLight, just need to answer some questions regarding your home, and HomeLight will send you a home estimate within minutes.
Redfin
Redfin works differently than most real estate oriented websites. The platform connects real estate professionals with homeowners, and the realtors are responsible for giving you a home estimate. This can be a good way to find the market value of your home, which may differ from your property’s appraised value.
Do I Need a Home Appraisal?
In most cases, yes. Most buyers want peace of mind knowing that the appraised value of a home is similar to their purchase price, but every so often a buyer will waive the appraisal to make their purchase offer more appealing to the seller. If a buyer needs a mortgage to buy your home, then a home appraisal is necessary.
Frequently Asked Questions
What does an appraiser look at?
An appraiser will look at almost everything in your home to find its market value. The appraiser will use comparable listings in your area and compare your property’s bedrooms, bathrooms and square footage to these recent sales.
Appraisers will look at expensive home improvements such as roofing, windows and appliances to get a more accurate value for your home. If your property has unique aspects such as an in ground pool, movie theater or other value added features, the appraiser will consider these as well.
Does a messy house affect an appraisal?
While a messy house won’t typically affect an appraisal, it can affect the sale of your home. Keeping your home clean will help you better market your home to buyers, making it easier to sell your property. This is especially the case during showings and open houses. First impressions are incredibly important when selling your home.
Can I use a previous house appraisal for a new loan or refinance?
In some cases, a previous house appraisal may be used for a new loan or refinance if it’s recent and meets the lender’s requirements. However, lenders may require a new appraisal to ensure the property’s current value and condition.