Discover how to maximize your home’s value in the eyes of a real estate appraiser.

Historically low mortgage interest rates make it a good time for many homeowners to refinance. In fact, a 30-year mortgage at 3.00% APR will save $19,757 compared to the same loan at 3.5% APR. If you’re planning to refinance your mortgage, don’t be surprised if your lender asks for an appraisal.

Why lenders ask for an appraisal when refinancing

Financial institutions want to lend money, but they also need to protect themselves. With any loan, there’s a risk that the borrower won’t pay it back. A credit union doesn’t want to lend more than a house is worth in case they have to sell it in a foreclosure. An appraisal lets a credit union know the current market value.

Why old appraisals aren’t used

Even if you bought or refinanced your home relatively recently, a new appraisal will be requested. Appraisals value a home at a certain point in time and many things can affect a home’s value—even within a few weeks.

Factors that may have affected your home’s value since its last appraisal include changing real estate market conditions, improvements to the home or damage to the home. An appraisal lets a bank know the home’s current value and condition.

What a home appraiser looks for

An appraiser will look at the actual condition of your home and the value of comparable properties.

In evaluating the condition of your home, the appraisal starts before the appraiser gets out of their vehicle. Curb appeal is the first thing they notice. The state of the landscaping, driveway and home’s exterior all influence their assessment.

Inside, the appraiser will look at the condition of the home. Has it been updated? Do the plumbing, electrical and HVAC systems work properly? How is the building quality of the home itself and any additions or renovations? What is the age of the home and components like the roof, windows and furnace?

The appraiser will note the size of the home and its rooms. They’ll also take pictures as they conduct the appraisal.

Things you can do to maximize home value

Appraisers are human beings and, like all of us, they make some judgments based on first impressions. Before an appraiser visits make sure to tidy up. Remove clutter, clean and create curb appeal by keeping the lawn and landscaping maintained.

Your appraisal prep tasks go beyond tidying up, though. To get your appraisal as high as possible, make sure there is nothing in obvious disrepair.

Here are some projects that will help boost your home’s value:

• Fix leaky faucets. If your budget allows, replace them with updated faucets.
• Repair any holes or damage to walls.
• Paint to refresh and boost eye appeal, inside and out.
• Make sure your home is free of offensive odors.
• Replace worn flooring or stained carpeting. If replacement isn’t an option, fix damage and have carpets cleaned by a professional.
• Make sure all home systems are in good working order, including HVAC, electrical and plumbing.
• Ensure that water drains away from your home.
• Repair screens. Clean windows inside and out.
• Trim bushes and tree limbs, especially those that touch the house or could cause damage in a storm.

Talk with the appraiser

When the appraiser visits your home, let him or her know about projects you’ve done to improve the home. You can help maximize your appraisal several ways:

• Provide a list of any upgrades and renovations you’ve made, like a new furnace or roof. Include the dates of the improvements and how much they cost.
• If you built an addition or finished the basement, make sure to point that out.
• Inform the appraiser of any new appliances. Provide the date purchased and how much was paid.

Inform the appraiser about anything that makes your home more valuable.

Ready to refi?

If it’s time for you to refinance your mortgage, talk to a Consumers mortgage loan officer at 800-991-2221. We’re here to help you!

Consumers helps thousands of members finance land, first and second homes, and home improvement projects each year. We’d love to help you with a mortgage or home equity line of credit.