Tapping into the equity in your home or investment properties involves many things …
One pretty big factor is … the appraisal!
A low appraisal might kill what you’re trying to do with your refi, or leave you with less than ideal loan terms and limit your amount of cash-out. (If you’re selling a property, it could jeopardize your sale.)
A higher appraisal assessment means you’ll likely have more loan options, typically with lower interest and better payments … and MORE cash out!
P.S. If you haven’t yet scheduled your Personal Strategy Session, click here to book a time.
Here’s tips to boost your chances of a good appraisal valuation …
Obviously, make sure your property is clean (inside and out). Appraisers are human, after all, and can be swayed by how pristine a home looks.
Tip #1: Make Sure Appraiser Knows Your Neighborhood
Often when an appraiser visits an unfamiliar property and doesn’t know the area intimately, chances are the appraisal will not come back with an appropriate property worth.
Supply as much information as you can about the quality of the neighborhood. Include info such as: nearby parks and amenities, public transportation and access to freeways, good school ratings, low crime rates, etc…
Tip #2: Make the Small Repairs You’ve been Postponing and Document
Since there are many things beyond your control (like the number of rooms, square footage, and location), focus on making minor renovations and improvements. Below are a few tips.
Whatever money you put into the house, keep proof of it: before-and-after photos, along with a well-defined list of what was spent on each renovation. This could persuade an appraiser to submit a valuation that far exceeds what he or she first called out.
Tip #3: Clean Up and Enhance Curb Appeal
Even the most stubborn appraisers can be swayed by a good-looking yard. Tree trimming, cleaning up, a few flowers in the flower beds, and paint touch up can all help the appraisal.
Keep in mind, curb appeal matters to potential buyers, as much as it matters to appraisers – landscaping can easily enhance a home’s value. Here are some tips for a quick landscaping fix:
Tip #4: Give the Appraiser Space & Don’t Be Pushy
Make sure you present the appraiser with all the great information you’ve gathered. You’ll want to meet the appraiser and then mention that you have some information to share with them before they get started. You would then go over your intel and then let them do their job undisturbed. If you hover, the appraiser might wonder what you’re trying to hide.
Once the appraiser is finished, you’ll have the chance to offer assistance. Ask the appraiser if they have any questions and if they feel there will be any issues with the appraisal.
Tip #5: Know the Comps in Your Area
One of the primary ways an appraiser determines the value of your home is by comparing it to similar homes that have recently sold nearby. If you know the comparables as well as or better than the appraiser, you can challenge any lowball comps they might use.
Perhaps a local real estate agent has sent you a mailer with recent sales in your neighborhood … In anticipation of an upcoming appraisal, keep this handy.
The market giveth equity and the market taketh away equity.
While these tips will influence the appraisal valuation of your property, the reality is there’s much you don’t control. A handful of low comps in the neighborhood and “poof’ there goes your equity.
So, if you think you’re sitting on some equity, consider if now’s the right time to take some chips off the table.
Book a Personal Strategy Session to discuss your particular situation