Home Appraisal TipsJul 08, 2021
Like many of you, I am currently in the process of doing a cash out refinance to pull out lazy equity from one of my BRRRR (Buy, Rehab, Refinance, Rent and Repeat) properties. It's a great way to optimize returns and scale your portfolio. I wanted to do a quick post to highlight what you can focus on in the appraisal process to ensure you have a successful refinance.
Know what helps add to the value of your home:
- Increasing your home's square footiage is a sure shot way of increasing it's value, but a simpler tactic is to ensure that the square footage on record is accurate, which surprisingly is not always the case.
- Interior : While a clean home is appealing, it pays to ensure there are no leaks, broken systems and damaged surfaces. A fresh coat of paint, updated window treatments, new faucets etc are a good idea but the most impact is when upgrades are made to kitchens and bathrooms - granite countertops, upgraded stainless steel appliances etc.
- Exterior : It doesn't hurt to focus on Curb appeal - de-clutter, ensure your lawn is well maintained
Provide data to your appraiser prior to their arrival:
You can contact the appraiser assigned to you prior to their arrival via email and provide them with
- A copy of prior appraisal report, date of purchase and cost at that time
- A list of all upgrades done on the property since purchase with itemized costs and permit information if it was needed.
- Comparable home sale data - the appraiser is under no obligation to use the comps you provide.
- New neighborhood amenities like highly rated schools, parks, transportation improvements, shopping etc that benefit residents
If you are planning on renovating or making additions to the property: the appraiser can factor in planned future improvements and provide a subject to completion appraisal as opposed to an As is appraisal.
If the appraisal value is lower than you expected- you can approach the lender with comparable home sales data, however as mentioned before, you are better off providing this data to the appraiser prior to their visit.
As always, plan for the best case scenario - but be prepared for the worst. Happy refinancing...
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