When you are refinancing a home, everything hinges on the appraisal. The appraisal is an unbiased report of the value of your home. All lenders require a home appraisal during the mortgage process, including when you refinance your home. The appraisal takes into account recent sales information on nearby or similar properties, as well as the current condition of the property and its location. While you choose your real estate agent and your lender, you cannot choose the appraiser. The appraiser is chosen by your lender to ensure a level of independence from both the buyer and seller.
Who Appraises the Home?
Whether you’re refinancing a home or buying a new one, home appraisals are done by licensed and/or certified professionals who are highly trained to determine the value of a home objectively and without bias. Appraisers are required to substantiate all findings that could influence a home’s value. This kind of work is heavily regulated, and issuing deliberately misleading reports leads to very serious consequences. For this reason, appraisers work hard to remain impartial.
Typically, the appraiser is actually in your home for only thirty minutes to an hour. During this time, they measure dimensions, count rooms, and take photographs of the interior and exterior of your home.
Comparables or ‘Comps’
After the appraiser walks through your home, they look at comparables or ‘comps’. This refers to homes that have recently been sold in your general area. The appraiser looks for houses that are similar in size, age, and style as your home to compare with yours.
What Can You Do to Ensure a High Value When Refinancing a Home?
When you are refinancing a home, there are many fairly inexpensive things you can do to improve your home’s value. Appraisers often value homes in $500 increments, so if there is a repair that costs more than $500, you should do it. Consider the following:
- Patch plaster cracks and water-stained walls.
- Change out soiled carpets.
- Get rid of persistent odors.
- Fix leaky faucets, broken windows, and damaged ceilings.
- Consider your home’s curb appeal. Broken garage doors and overgrown landscaping will work against you. Help your home look welcoming.
- Carpet, tile, windows, and other permanent fixtures should be brought into the 21st century. Regardless of your home’s age, the newer it looks, the better.
- Freshen up your home’s paint inside and out.
- Get rid of unnecessary clutter.
- Show some neighborhood pride. If your neighborhood has a new school or new roads, let the appraiser know.
- Highlight repairs and updates you’ve made over the years that your appraiser might not notice, like a new roof or insulation.
What Does a Home Appraisal Cost and Who Pays for It?
While your lender will hire the appraiser, you, the borrower who is refinancing a home, are responsible for the cost. The fees generally range between $450 and $750, but they vary depending on the size and location of your property.
To get started refinancing a home, contact us today. At BrightPath, we help clients refinance their existing homes or get mortgages for new homes. We look forward to working with you.