Avoid Low Home Sale Appraisal Problems

The collapse of the mortgage industry has lead to many harsh realities when selling a home. After you think you have finally won the lottery - a qualified buyer with an offer on your home. You realize there are still some stumbling blocks to reach your goal of a closed home sale. One of the toughest stumbling blocks is the home appraisal. The banks are nervous about home values & the appraisals are reflecting the tumbling home market. The appraisers will only use comparable home sales in your area that are less than six months old.

The appraisal may be your most serious issue prior to a successful sale. There are several things that you can do to increase your odds of getting the home to appraise at the sale price. First of all make sure your home shows like a model home even for the appraiser. Please make sure the home buyer/bank has a short time period to have the appraisal performed. Do not allow them to wait until 3 days before closing to order the appraisal. I would wait to pack up the house until this is complete. The home is hopefully staged for potential home buyers, and I would keep it this way until the appraisal is over.

Secondly, I would make sure that recent home sales that support the sale price are neatly placed on the kitchen counter by the lock box sign in sheet. If you Realtor can attend the appraisal, they can hand the appraiser the comparable home packet. The odds are that they will at least glance at the supporting comparable home sale packet. On an even better note, they see their job is already done & they may use these comparable home sales for the appraisal. This is key in a declining market. Banks are sending appraisers from different areas into neighborhoods that are unknown to them. The banks are also not allowing a second independent appraisal of the home to dispute the original appraisal. You are stuck with this figure with this bank/mortgage company. They are having a blind appraisal done on the home. The appraiser no longer knows the contract price before the appraisal. The Realtor can give the appraiser this information in person.

If you can get a copy of your tax record, make sure that the square footage is reported accurately. The majority of home appraisers will get the square footage from this tax record. If the square footage is smaller than reality then make sure that a note is attached to the comparable home sale packet noting this error. Appraisers base their values on square footage, so this could make a big difference in value.

The best thing advice is to put your best foot forward. Treat the appraiser as you would your most important home buyer.