7 ways to improve your chances of a good appraisal

Posted by  on Nov 09, 2012

Appraisers have the difficult job of determining your home's market value based on comparable homes in your area. While there's both art and science involved with appraisals, estimating value has become more complicated in markets with foreclosures and short sales that may not be in comparable condition to your home. You can't change the value of homes near you, but you can take steps to make sure your appraiser has the best possible information and the best possible impression of your home so that you can qualify for a home refinance. And it's worth the effort because if you have a lower loan-to-value because of a higher appraisal, you may qualify for the lowest mortgage rates.

Better appraisals tip refinancing odds in your favor

1. Clean and declutter your home. You won't be able to change things like your home's location or the number of bedrooms and baths, which have the biggest impact on your home value, but you can give the appraiser a better sense that your property has been maintained. Mow your lawn, trim your shrubs and make sure your exterior looks well-maintained.

2. Make a list of your home improvements. Be sure to include items such as a new roof or extra insulation that might not be visible.

3. Know your neighborhood home values. In many instances an appraiser will be brought in from out of town and won't be as familiar with nearby property values. If you know about recent home sales, have that information on hand.

4. Point out neighborhood amenities. New shopping centers or the availability of public transportation can change the value of your home, so be sure the appraiser knows about anything that could make your home more valuable than other similar homes.

5. Keep your pets under control. The last thing you want is an annoyed or distracted appraiser, so make sure you put your pets someplace safe and out of the way during your inspection.

6. Stay with the appraiser during your home inspection. You can point out home improvements and watch to make sure you are getting a thorough inspection.

7. Contact your lender if your feel your appraisal is incorrect. While many homeowners are dissatisfied with their appraisal, that doesn't mean the market value is necessarily wrong. However, if you feel your appraiser was unprofessional or lacked local market knowledge, you can ask your lender for a second appraisal or start the refinance process again with a different lender.

Your home equity (or lack of equity) can be an obstacle to a refinance. You could be denied a home refinance, be forced to pay private mortgage insurance if your loan-to-value is above 80 percent or pay higher mortgage rates if your home's value is too low. Make sure you are prepared for the best possible appraisal and be ready to request a second appraisal if you feel your first appraisal is incorrect.

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