Preparing for an appraisal
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Anonymous
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We're refinancing our house. As we're doing a cash out refinance which will have a better rate if we have more than 40 percent equity, we're anxious to maximise our chances of a strong value.
Any advice on how to prepare for an appraisal? Does it make a difference if we spend a lot of time cleaning/decluttering etc or not? Is it going to be worth the effort? What's the etiquette on giving info to the appraiser about comps and the neighborhood? FWIW I'm not convinced that the appraiser is particularly familiar with our specific neighborhood as he's driving in from Maryland and while I don't know where exactly I'm guessing it's far out as he said he couldn't be here before 11am because of traffic! (We're in DC). This is a gentrifying neighborhood and prices can vary by the block here. Also, the comps I've looked at clearly fit into two camps 1) fully renovated near immaculate homes and 2) investor special fixer uppers. The former sell for $500k and up, and the latter $250-350. Our house is neither. It's mostly renovated and while the sq footage is similar to some of the $500k plus homes, we haven't added bathrooms as those homes invariably have. Bottom line, I think it will be tough to find really useful comps. We're hoping it will appraise for more than $400k. Any tips if you've been through the process recently? Or any appraisers reading this who can advise what helps and what hinders your decisions? |
Anonymous
| Remember that comps don't need to be right in your exact neighborhood. They can use a comp from a few miles away if that house is similar to yours. In DC that can put you in a completely different neighborhood with higher house prices (which is fine). I think giving a list of comps to the appraiser is fine. If they don't want to use them they won't. We did clean before our appraisal and I'm glad we did because he took pictures. Good luck! |
Anonymous
what does zillow.com say |
Anonymous
| They say it doesn't matter, BUT appraisals are done by humans, and they are affected by the environment they experience. So, yes, tidy up, make sure the house smells nice, etc. I don't think you need to go so far as if you were trying to sell your home, but maybe as if you were about to expect formal company. |
Anonymous
| We cleaned and decluttered. Provided comps as an FYI and they were happy to take them. We also provided a list of improvements we have made to the house since we bought it. They do take a lot of pictures for documentation. |
Anonymous
Huh? Does this have any bearing? Would an appraiser pay any attention to Zillow? Anyway, Zillow says $393k, but it says $420k for the house next door which is in terrible shape and completely unrenovated and definitely worth way less than ours. It says $538k for the house a few doors down that is under contract for $575k. I don't think that Zillow is very helpful or accurate. It is probably based on tax assessments and we got lucky as our assessment is now slightly lower than some other comparable houses (e.g. the house next door that's in terrible shape). |
Anonymous
Thanks! This is what worries me a little, in case they use comps from another lower priced neighborhood, or use comps from nearby but on a busy undesirable street. We live in NW, but NE is very close by and prices are a lot lower there. If he uses NE comps then he can argue our house is worth less. Does anyone know if when lookng for comps they are looking more at the total sq footage or at the number of beds and baths? FInding similar sq footage sales isn't too hard, but most houses have squeezed in an extra bathroom in the same space we have. |
Anonymous
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1. Zillow sucks. It does not work for urban locations, especially if the area is gentrifying.
2. Give the appraiser comps and don't be afraid to go to other neighborhoods that are 10 or so blocks away to support your cause. Use the spread out burbs in your favor. Give him MLS numbers, b/c he will go on the MLS to pull comps. If you are still on good terms with your Broker (agent), have them run comps and also send you the comps you want to use in their email. The appraiser will respect the agents opinion a little more. 3. Clean and tidy. The appraiser is human. Make it nice. 4. Point out any positive features about your house or hood that only you would know. 5. If you are present, be nice but not over-bearing. Be aware that the appraiser might want to get out of there ASAP to go to the other places and end the work day at a reasonable hour. Basically, don't be a chatty homeowner, unless you really think the appraiser wants to talk. Don't feel weird. The appraisers will throw out anything absurd, but they are happy to have the comps, etc.. It gives them more to info with less work. Good luck. |
Anonymous
Zillow gives you a range, to get an accurate price edit your home , add upgrades, adjust any missing tax info like rooms, and hand pick some comps. Try that out, its pretty accurate |
Anonymous
its pretty accurate if you live in a cookie cutter suburb. In the city it is awful, particularly if you live in an area with a mix of housing sizes and types. |
Anonymous
Right keep telling yourself that when a human appraiser does the same low value. Everyone thinks their house is special becuse of how yoy have personalized and styled your home, it is psychological, guess what its not. http://www.boston.com/realestate/news/blogs/renow/2011/12/my_home_is_wort.html |
Anonymous
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Zillow, Redfin, & others are based on tax assessments as a formula for prediction of an estimate. Redfin gives a low, mid, and high... but all three are wrong in my neighborhood in MD. You will know this if you life in a rowhouse or townhouse neighborhood and your neighbor's house is the same model, same features as yours and it's "estimates" are less than yours.
Don't forget, tax assessments can be inaccurate... it's moronic to think the assessors have that all right. OP, it *could* benefit you to protest the assessment and have it raised. Recent SALES, updates and/or renovations, location, and tax assessments should all be taken into account. In an urban location, especially a changing one, new restaurants & goods/services can also raise an assessment. OP if there are new retail/restaurants opening in your neighborhood point this out to the assessor... let them know the location is important & why. |
Anonymous
| Thanks everyone. The appraiser came by yesterday. I printed out a couple of comps to give him. they weren't as close by as I'd hoped, but within about 8 or so blocks, similar size home each with one more bathroom prices $550-600k. He seemed like he had a decent idea of the neighborhood. I also gave him a list of our improvements to the house, and a list of improvements to the neighborhood (huge change since I bought in 2003 including new coffee shops, bars, yoga studio, playgrounds etc) and to our block. We'll find out in a few days what he thought. I'm still crossing fingers that he doesn't use fixer uppers on busy main roads as comps, otherwise there shouldn't be an issue with getting beyond $400k as it's only the ones in really poor shape sold to investors and on busy undesirable sketchy roads that have sold for less than $400k in recent months. |
Anonymous
x2. |
Anonymous
It's not based solely on tax assessments, it's also based on comps and SF, i.e. the product of average price per square foot of local comps x SF of your house per tax records (which are often wrong). That said, I agree it's not very accurate b/c it doesn't factor in remodeling, improvements, condition, etc. By way of example, it is currently off (too low) by $25K on our current home in DC, which we are under contract to sell in 2 weeks -- the Zestimate is $366,500 and we are selling for $393,000 (private sale w/ no agents). It is off by $150K (again too low) on the new home we are buying in Montgomery County -- the Zestimate there is $747,700 and we are buying for $900,000 (another private sale w/ no agents), which was $20K under the appraised value per the bank's (conservative) appraisal. |