After you accept an offer from a buyer who is financing the purchase, the lender will usually order an appraisal. The appraiser’s job is to give an independent opinion of the home’s market value, which helps the lender confirm that the loan amount makes sense. As a seller, you cannot and should not try to sway that opinion. What you can do is make the visit smooth and make sure the appraiser has an accurate picture of the home.
Understand who the appraiser works for
The appraiser is engaged through the lender, often by way of an appraisal management company, and federal rules are designed to keep the appraisal independent from the people who have a stake in the sale. Neither you nor the buyer chooses the appraiser or suggests what value to reach. The appraisal is not a negotiation. Being courteous and helpful is appropriate; pressuring or hovering is not.
Make every part of the home accessible
An appraiser needs to see the home’s size, layout, condition and features. Before the appointment:
- Clear paths to the attic access, crawl space, electrical panel, water heater and heating and cooling equipment
- Unlock gates, sheds, outbuildings and any locked rooms
- Secure pets, ideally away from the home during the visit
- Turn on lights and make sure all utilities are on
An appointment that has to be rescheduled because a gate was locked or the power was off can delay closing for everyone.
Document your improvements
Appraisers rely heavily on sales of comparable homes, then adjust for differences in size, condition and features. Improvements that are not obvious at a glance can be easy to miss. Prepare a simple one-page list of significant updates with approximate dates, such as a roof replacement, new heating and cooling equipment, a kitchen or bath renovation, new windows or added insulation. Note permits where you have them. Your agent can share this list, along with information about recent comparable sales, through the proper channels.
Present the home in good condition
The appraisal is not a showing, and the appraiser is not judging your decorating. Still, condition matters. A clean, uncluttered home makes it easier to see what is there, and small maintenance items, like a missing outlet cover, a dripping faucet or a cracked window pane, can draw attention that is easy to avoid. If you agreed to repairs in the contract, try to have them completed and documented before the visit.
If the value comes in low
Sometimes an appraisal comes in below the contract price. When that happens, your agent will review the report for factual errors, such as the wrong square footage or a missed feature, and may ask the lender about a reconsideration of value if there is solid supporting information. Beyond that, buyers and sellers often discuss options such as renegotiating the price, meeting in the middle or the buyer covering the gap with additional cash. What makes sense depends on your contract terms and the local market, so lean on your agent and, where needed, a real estate attorney.
A smooth appraisal is one more step toward a smooth closing. Preparing takes an afternoon, and it keeps the whole process moving.
Preparing Your Update List, Step by Step
A clear, honest summary of improvements is one of the most helpful things a seller can provide. It takes some digging, but it is worth doing well.
- Gather your records. Look through receipts, contractor invoices, warranty cards, permits and bank or credit card statements for major projects.
- List each improvement with an approximate date. For example, a roof replacement, a new heating and cooling system, new flooring, a kitchen remodel, or new windows.
- Note what was done, not just that it was done. “Replaced roof, including underlayment and flashing” is more useful than “new roof.”
- Include permits and warranties where they exist. A transferable warranty can be a selling point too.
- Separate repairs from upgrades. Fixing a leak is maintenance. Adding a bathroom is an improvement. Both are worth noting, but they tell different stories.
- Keep it to one page. A concise list is easier for everyone to use than a thick folder.
- Give it to your agent. Your agent can share it through the appropriate channels rather than handing it to the appraiser yourself.
Small Fixes Before the Appointment
Some items are worth addressing in the days before an appraisal, both because they are quick and because certain loan programs have property requirements that appraisers note. Depending on the home, consider:
- Replacing missing or broken outlet and switch covers.
- Fixing leaky faucets and running toilets.
- Repairing cracked window panes and torn screens.
- Securing loose handrails on stairs, decks and porches.
- Making sure smoke and carbon monoxide detectors are installed and working.
- Touching up peeling paint, especially on older homes.
- Clearing gutters and making sure downspouts drain away from the house.
Your agent can tell you whether the buyer’s loan type has specific requirements that may come up.
Mistakes Sellers Should Avoid
- Trying to influence the value. Suggesting a number or pressuring the appraiser is inappropriate and can create problems for the transaction.
- Overstating improvements. Describe projects accurately. Exaggeration can backfire if details are checked.
- Hiding problems. Covering a known defect does not change the home’s condition and can raise disclosure issues.
- Missing the appointment window. Delays in access can push back the appraisal and the closing date.
- Starting new projects. A half-finished renovation can complicate the appraisal. Finish projects or postpone them.
Questions Sellers Ask
Should I be home during the appraisal?
It is generally fine to be present to provide access, but give the appraiser room to work. Answer questions if asked and otherwise let the visit proceed.
How long does an appraisal visit take?
It varies with the size and complexity of the home. Much of the appraiser’s work, such as researching comparable sales and writing the report, happens after the visit.
Will the buyer’s appraisal affect future sales if this deal falls through?
An appraisal is ordered for a specific lender and loan. A new buyer’s lender would typically order its own. Your agent can explain how a past appraisal might come up in a later negotiation.
What if I disagree with the appraised value?
Share your concerns with your agent rather than contacting the appraiser directly. Your agent can review the report for factual errors and, if there is solid evidence, such as a comparable sale the appraiser did not consider, work through the lender’s reconsideration process.
