When selling or refinancing your Chicago home or Chicago condo, nothing is more important than the appraisal. In this economic climate prices have dropped tremendously, but don’t let your home be undervalued. As originally reported by Money Magazine, below are five tips to insure your home is being appraised accurately before you sell or refinance.
- “It’s up to you to make sure your home isn’t mistakenly valued below your sale price or loan limit.” – Before the real estate market took a turn for the worse, many lenders encouraged appraisers to inflate property values. However, since the fall of the market, banks have been working with independent appraisers to prevent inflation. Despite this positive change, it’s still your responsibility to make sure your home is valued properly. Independent appraisers need to get the job done quickly, which doesn’t always translate to accuracy. An overvalued property is bad, but so is an undervalued one.
- “Ask a real estate agent to help you ID recent comparable sales in your area and try to get the scoop on the circumstances from your neighbors.” – Researching comparable sale prices for home’s in your neighborhood is crucial to the accuracy of an appraisal. But be sure to go beyond the numbers, too. Try to find out from your neighbors why others in the area moved. Extenuating circumstances, such as a job transfer or divorce, may have caused area homes to be undervalued. Get the facts and let the appraiser know.
- “Appraisers don’t give out grades for stellar housekeeping, but the appearance of your home nevertheless has some influence on their final number.” – Treat your appraiser as if he/she were stopping by for an open house. A clean house with a tidy lawn lets the appraiser know you took care of your investment and its his/her job to look at the home through a buyer’s eyes. Would you be interested in home that looked run down and unkempt?
- “An appraiser who is under time pressure can’t be counted on to notice and research every detail of your house and neighborhood.” – Before your appraiser arrives have a typed list of your home’s key features to prevent any oversights. Be sure to point out extra additions or work you’ve done. Let him/her know that the marble in the kitchen was imported from Italy and the crown molding was recently restored to its original condition. Also, think beyond your home’s perimeter. What are the perks of your neighborhood the appraiser can’t see? Is it close to public transportation? Is there a top-notch school right around the corner? No amenity is too frivolous. Think about all the reasons why you wanted to buy the home in the first place.
- “Request a copy of the final report when it’s done; lenders are required to give it to you.” – Once you’ve received your copy look it over to double check for any mistakes (square footage, stats, etc.). If you find any errors ask the appraiser to recalculate the value. If they refuse, let the state’s real estate appraisal board and your bank or lender know. Your bank can’t do anything to fix the problem, but they should be in the loop.