Appraisals are based on recent sales prices of comparable properties.
And in rising price markets, those sales prices might not be high
enough to support the newest deals. There have been many places in
California reporting appraisal problems. Recently, the federal
government issued new rules aimed at improving the appraisal process
as it pertains to high-interest mortgages on rapidly appreciating
But those rules don't go into effect for a year, and don't apply to
most conventional loans. It pays to protect your own loan before the
bank even thinks about sending that guy with the clipboard over to
your house. "The reality is that the appraiser is only there for
30 minutes at most," says Brian Coester, chief executive of
CoesterVMS, a nationwide appraisal management company based in
Rockville, Maryland. "The best thing a homeowner can do to get
the highest appraisal possible is make sure they have all the
important features of the home readily available for the
Here are eight ways you can bolster your appraisal:
APPRAISER KNOWS YOUR NEIGHBORHOOD: Is the appraiser
from within a 10-mile radius of your property? "This is one of
the first questions you should ask the appraiser," says Ben
Salem, a real estate agent with Rodeo Realty in Beverly Hills,
California. He recalled a recent case where an appraiser visited an
unfamiliar property in nearby Orange County and produced an appraisal
that Salem said was $150,000 off. "If the appraiser doesn't know
the area intimately, chances are the appraisal will not come back
close to what a property is really worth." You can request that
your lender send a local appraiser; if that still doesn't happen,
supply as much information as you can about the quality of your neighborhood.
OWN COMPARABLES: Provide your appraiser with at least
three solid and well-priced comparable properties. You will save her
some work, and insure that she is getting price information from
homes that really are similar to yours. Ask your realtor to
help you get the best list.
KNOW WHAT ADDS
THE MOST VALUE: If you're going to do minor
renovations, start with your kitchen and bathrooms, says G. Stacy
Sirmans, a professor of real estate at Florida State University. He
reviewed 150 variables that affect home values for a study sponsored
by the National Association of Realtors. Wood floors, landscaping and
an enclosed garage can also drive up appraisals.
FIX-UPS: If you've put money into the house, prove
it, says Salem. "Before-and-after photos, along with a
well-defined spreadsheet of what was spent on each renovation, should
persuade an appraiser to turn in a number that far exceeds what he or
she first called out." Don't forget to highlight all-important
structural improvements to electrical systems, heating and cooling
systems - which are harder to see, but can dramatically boost an
appraisal. Show receipts.
TALK UP YOUR
TOWN: If your town has recently seen exciting
developments, such as upscale restaurants, museums, parks or other
amenities, make sure your appraiser knows about them, says Craig
Silverman, principal and chief appraiser at Silverman & Co. in
BETWEEN UPSTAIRS AND DOWNSTAIRS: Many homeowners
covet that refinished basement, but that doesn't mean appraisers look
at it the same way. "Improvements and additions made below
grade, such as a finished basement, do not add to the overall square
footage of your house," says John Walsh, president of Total
Mortgage Services in New York. "So they don't add anywhere near
as much value as improvements made above grade." According to
Remodeling magazine, a basement renovation that cost $63,000 in
2011-12 will recoup roughly 66 percent of that in added home value.
That's not as good as an attic bedroom, which will recoup 73 percent
of its cost. Even similar bedrooms typically count for more if they
are upstairs instead of downstairs.
Even jaded appraisers can be swayed by a good looking yard.
"Tree trimming, cleaning up, a few flowers in the flower beds
and paint touch up can all help the appraisal," says Agnes Huff,
a real estate investor based in Los Angeles. That advice holds true
indoors, too. "Get rid of all the clutter in your home,"
says Jonathan Miller, a longtime appraiser in New York. "It
makes the home appear larger."
APPRAISER SOME SPACE: Don't follow the appraiser
around like a puppy. "I can't tell you how many homeowners or
listing agents follow me around in my personal space during the
inspection," he says. "It's a major red flag there is a
problem with the home."
And while you're at it, make the appraiser's job as pleasant as
possible by giving your home a pleasant smell. At a minimum, clean
out the litter box. Baking some fresh cookies and offering him one or
two probably won't sway your appraisal, nor should it. But it