Understanding how to prepare for a home appraisal for refinance can be the difference between a successful loan approval and certain refinance application denial. The home appraisal offers the proposed lender the opportunity to “screen test” your home and decide if it is worthy of the financial risk. A home appraisal for refinance requires the applicant to be sure that the home is well presented and puts on its best show. While the applicant cannot control comparable appraised values in a given geographical area, the applicant can certainly make every effort to put his home in the upper range of those values by following a few preparation tips.
- Be flexible when scheduling and hosting the appraisal. Set aside a two hour window for the schedule and be flexible with your availability. Appraisers are often busy and overbooked so there may be delays and rescheduling. You will want the appraiser to take time to thoroughly interview your home so be aware that some appraisals may run over the scheduled time frame.
- Be sure that the landscaping and exterior are well groomed. The exterior of your home offers the appraiser an important first impression. Your home is being put to the ultimate test. Being neat and orderly at the onset puts the best foot forward and prevents the appraiser from entering with negativity.
- Make sure that your entire home is accessible and photogenic. Try to make sure that all rooms of the home are ready for their close up so to speak. The appraiser will be taking photos of every room to help him or her compile the appraisal report. Make sure every room and common area is accessible, neat, clean and photo ready.
- Complete all general home maintenance tasks prior to the appraisal. Take a look around the house and replace any obviously broken or missing molding, replace missing outlet covers, repair leaky faucets or any other obvious cosmetic blemish. Remember, the appraiser is visiting your home to document its overall value and upkeep. If there are simple repairs needed, the appraiser is more likely to assume that larger items are not well maintained.
- Prepare a list of all recent improvements to the home in advance. If you have added a new central air system, updated appliances or added insulation or a new roof since your last appraisal, be sure to document it. Provide receipts and material lists to back up claims of the money involved in renovations. Such upgrades and updates can push your home's value upward to the higher value ranges if they can be documented and supported. Having the list completed in advance helps applicants remember everything during a busy appraisal and gives the appraiser something to refer back to aside from his notes when completing the final report.
- Have legal documentation ready to support claims of renovations and proof of work. Building permits, deed, surveys and permits for home improvement will all further support claims of upgrades and value adding additions.
- Be educated on recent sales and home prices in your area so that you can mention these to the appraiser. The appraiser will review home sales in your area that are comparable in size and style to your home. However, sometimes those databases may not include the most recent sales in an area. If you know of a similar home in your neighborhood that may have sold earlier in the week or even during the month, letting the appraiser know that value may yield more favorable comparative values to your home’s appraisal.
In most situations, a home appraisal in a refinance application is the lender’s only personal view into the home and, presumably, into the personality of the applicant. If the home doesn’t present itself well, the lender will be less likely to overlook any minor flaws in the remainder of the application, such as previous credit risk or job history.
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