Katy Home Sellers: How to Prepare for an Appraisal, Part Two

In May 2009, a new law, The Home Valuation Code of Conduct, or HVCC, became law.  One of the main rules prohibits mortgage brokers from ordering appraisals directly from, or having any contact with, a licensed real estate appraiser.

Also, a lender cannot approach a an appraiser with  relevant information, such as comparable sales. Lenders are forced to use third-party appraisal management companies who oversee all aspects of the appraisal process.

Valuation may come in low due to an out-of-area appraiser who is totally uneducated with respect to neighborhood nuances and values. Due to the decline in the housing market, based a great deal on inflated appraisals, appraisers now go back only three months, instead of the traditional six months, when considering comparable sales. Foreclosures are also factored in although they often skew the true value.

This being said, there are things that a seller can do to increase chances of their house appraising for the sales price.

• Once your appraiser has arrived, you do not need to accompany him or her along the entire site inspection. Rather, be available to answer any questions about your property and point out any home improvements.
• Make sure that all areas of your home are accessible, especially the attic.
• Appraisers see hundreds of home a year and they will look past most clutter. However, a good impression can translate into a higher home value.
• Repair minor things like leaky faucets, missing door handles and trim. It is only human nature to assume that there is quite a bit of “differed maintenance” if the small things have not been fixed.
• If your borrower is applying for an FHA/VA loan be sure to address specific items such as install smoke detectors on all levels, especially near bedrooms. You must install handrails on all stairways. You should remove peeling paint and repaint the affected area. Ask a lender or your Realtor for more suggestions.