Thursday, April 11, 2013

Residential Real Estate Appraisals Are Potential Deal Killers for Sales, Mortgage, and Refinance

Skyrocketing Los Angeles Home Prices Make Appraisals Tricky

Curb appeal will effect appraised values

The market for residential homes in Southern California and other markets throughout California and the US is very, very tight.  Low inventories and historically low mortgage interest rates are creating buying frenzies.  Where a year ago, a new listing might sit for months without an offer, today a quality property in some neighborhoods might get multiple offers above the asking price the first day it is on the market. 

This creates a nightmare for appraisals.  If the most recent comp for your area is $40,000 less than the buyer just offered you, it may be hard to get an appraisal that will help the buyer secure a mortgage.  We help people through such situations with creative approaches, but you can help yourself by doing everything possible to increase the value determined by the independent appraiser.

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Nine Tips for Getting the Highest Possible Appraisal on Your California Home

What can you do to Help Maximize the Value of Your Appraisal?  Here is a list:
  1. Get your home inspection done before the appraiser comes.  You'll need to get it done anyway.  So better to have a professional give you some ideas ahead of time.  He may see things that you will need to do anyway or that you could do that will keep the appraiser from downgrading the home.
  2. Have you made any improvements, additions, or changes in the last five years.  Get out the receipts and make a list showing the costs associated with those changes.  
  3. Has there been any changes in the neighborhood.  A new school, shopping center, or road improvements.  These could all add value that the appraiser would be unlikely to catch.
  4. You might even want to ask the appraiser if he has done other work in your area.  If not, fill him in on what makes the neighborhood great.  If there are other homes on the market or recent sales, don't assume he will know about them.  Show him the comps you think matter.
  5. Clean up everything.  Clutter inside and outside.  Get a real manicure job on your lawn and landscape. 
  6. Take a half a day to do minor repairs.  Maybe you did this already to help sell the house.  But go check again.  Is there scuffed carpeting that you should remove, assuming hardwood or a good surface is underneath.  Touch up any pealing paint.  
  7. A good mortgage broker may be able to select the company he prefers.  Ask him about that.  In California the lender and appraiser can't have any relationship, but there are differences between the services.
  8. Treat your appraiser well, like you would any invited guest.  Try not to be obnoxious, overbearing or to much pushy.  But do sell him on the value.  Get his business card.
  9. Check the appraisal after it is submitted.  You can appeal.  
If you are your buyer or a friend or neighbor is in need of a mortgage, we are here to help.  Call for a no obligation consultation about any aspect of the process. 

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