What do appraisers look for in a refinance?

What do appraisers look for in a refinance?

There are several things an appraiser looks for in a refinance. These include your home's condition and size, comparable properties, home system conditions, amenities, improvements and remodels, negative features, and location.

Your home's condition and size

One of the first things an appraiser will look at when doing a home appraisal is the general condition of your home. When doing this, they'll also consider the layout and size of your home. Note that they'll look at both the outside and inside of your home.

In terms of size, they'll consider your home's square footage and the number of bedrooms, bathrooms, and total rooms in the home. They might even ask to look at some floor plans so they can get an exact number for each space in your home.

Obviously, there isn't much you can do about changing the number of rooms in your home before refinancing your property if you aren't ready to splash out a ton of cash. However, if there are any serious issues—for example, not enough bathrooms for the size of the home, it might be worth doing a renovation. Otherwise, the value of your home will be much lower.

As for condition, you want to make sure that the rooms don't have any issues an appraiser could see at first glance when checking out the interior and exterior of your home.

There are additional things to watch out for, which we'll go into later on.

Comparable properties

Even though it isn't technically part of an appraisal on a property, appraisers will look at comparable properties to help determine how much they think your home is worth. If you're curious now to get an idea of how much your house is worth, you can do this too.

Of course, there will be other specific features your appraiser looks at, so when you average how much homes in your area are selling for, you won't have the exact number. However, you'll have a pretty good idea. This can help you decide whether you want to invest in the appraisal in the first place.

To get started, go to a realtor website that provides information about the homes near you. Make sure the site you join is one that provides not only information about price, but also about the features and images of the home. This way, you can get a better idea of how your home might measure up when the appraiser comes.

Home system conditions

An appraiser will also look at your home system conditions. These include your electrical system, plumbing system, and HVAC setup. When it comes to your electrical system, the appraiser will check to see whether:

• All lights are working.
• There aren't any stray wires or loose connections.
• Your fuses don't get overblown often.
• The amount of plugs makes sense for your home.
• The plugs are safe to use.

If you have any issues that might raise a red flag to an appraiser when they analyze your electrical system, you should have an electrician come in to fix them. An easy fix, if you don't have too many problems, is to change all your bulbs so they all turn on.

As for the plumbing system, you should make sure that all faucets work properly and that you have hot water in all of them. You'll also want to make sure all your pipes are connected properly to appliances such as your laundry machine.

An easy fix is to improve the water pressure. While this might not be a serious issue for you, it doesn't look great to the appraiser. Finally, make sure all your toilets flush efficiently and quickly and that you don't have any leaking pipes.

As for your HVAC setup, the appraiser might ask you these questions:

• "Is there any corrosion?"
• "Are there any strange smells coming out?"
• "Does it properly work?"
• "How old is the system?"

If you think any of these questions might have a negative answer, you should call in a professional and have this issue fixed immediately. A fully functioning HVAC system is an important piece of what the appraiser will be looking at.

Amenities

In addition to making sure that your home is in good condition and all its systems are working properly, the appraiser will take the amenities into consideration too. If you have any additions to your home that make it more valuable, remember to point these out to the appraiser.

A deck or patio

If you have a deck or patio out back, this will drive up the value of your home. To add as much value as possible, clean the area of any leaves or residue before the appraiser comes. It will also help to add a touch of decoration, such as furniture or flowers.

You want the deck or patio to look like it might in a magazine. This way, the appraiser will be able to envision just how much value there is in having it be part of your home.

Outdoor living area or kitchen

In the past year or so, many people have been adding outdoor living areas or kitchens to the exterior of their homes. Of course, this is a big renovation, so if you don't have this setup, there's no need to add it to your home now.

However, you can still make a few outdoor changes that you can enjoy yourself. This could include getting outdoor lawn furniture, buying a barbecue, or installing a music system.

If you do have an outdoor living area or kitchen, clean it thoroughly beforehand so that there aren't any tree branches or leaves on it. If it looks like it hasn't been used in a while, it won't add as much value during the appraisal.

Sunroom or special indoor space

Finally, if you have a sunroom or special indoor space, you want to show this off too. Clean it thoroughly, place furniture around in an aesthetically pleasing way, and bring a little life in by adding some plants or paintings.

Improvements and remodels

Something else to show off is improvements and remodels. These include replacement roof repair, plumbing upgrades, durable fixtures, an added bathroom, an energy-reducing remodel, and an expansion or remodeling of your kitchen.

Replacement roof repair

If you had your roof replaced or repaired while living in your home, let your realtor know. Give them the paperwork as well about how extensive the repair was. Because this type of repair isn't always visible, you'll get more value in your appraisal if you provide this information.

Plumbing upgrades

Another home improvement that an appraiser might not immediately spot is a plumbing upgrade. However, if you've recently had many of your pipes upgraded, you should let the appraiser know. Inform them about the material and areas changed.

Durable fixtures

Another impressive change to your home is changing your old fixtures for durable ones. Especially if you bought a pre-owned home, replacing fixtures with ones that last longer will provide your home with value for a long period of time.

While your appraiser will notice that the fixtures are working, they might not know that they're new and built to last. For this reason, you should provide them with the information about the new fixtures you received when you bought and installed them.

Added bathroom

When the appraiser goes into your added bathroom, point out any modern features you included when having it added to your home. This might include high water pressure, dimming or heat lights, and any jets in the bathtub.

Energy-reducing remodel

If you've made any changes to your home that have driven down your energy bills, let your realtor know. This might include replacing your furnace, installing an eco-friendly HVAC system, or putting solar panels up on your roof.

Because this makes your house more modern, greener, and makes energy bills less expensive, it's a remodel that will drive up your home's value significantly.

Expansion or remodeling of your kitchen

If you've expanded your kitchen, the appraiser will be able to tell by looking at the square footage of the space. However, your entire remodel might not be visible. Point out any features, such as a modern fridge or a fancy sink fixture.

Negative features

The appraiser will also be on the lookout for negative features when appraising your home. These can include an outdated kitchen, peeling paint, leaking pipes, or an exterior that's weathered and has become ugly over time.

Before the appraiser comes, fix as many of these issues as you can. Otherwise, you might end up with a negative appraisal that makes it impossible for you to get the refinancing you need.

Note that repainting is one of the easiest, cheapest fixes and can completely transform your home. Whether you're repainting the exterior or interior, this will keep your home looking fresh and beautiful.

If you can't repair everything—for example, update your whole kitchen and all the appliances in it, which can be pricey, then the next best thing is to clean these areas as best as you can.

Adding a few touches, like a potted plant, can also make the area look much more modern.

Location

Finally, an appraiser will think about your home's location when deciding how much it's worth. If you live near a loud highway, for example, this might bring down the value of your home. The same goes if it's a highly-trafficked area or there's a school nearby.

To prepare for your appraiser's visit when it comes to location, you should put together a list of all the nearby places that would look good.

This might include a nearby shopping area, being close to a city where many jobs are, or having a neighborhood pool nearby.

Need more information?

Now that we've answered the question "What do appraisers look for in a refinance?", you might need additional information. Maybe you want help budgeting for changes you can make to your home before your appraiser comes.

Or maybe you're considering selling your home too and what to know what your options are.

Whatever information you need, we can help. At iBuyer, we're experts when it comes to home selling. We'll also buy your home with cash. To get a cash offer on your home, submit your address here!