posted
We're refinancing our house and, therefore, are going to need to have our house appraised. Does anyone know of anything special we should do to get ready?
posted
If you can make anything that is dark light, that helps things look bigger. Trim your bushes? I guess you live in Arizona. I dunno, just spiff things up. It sounds stupid, but you might check out a book on Feng Shui. Bake something just before the appraiser is scheduled to arrive (For the smell) or heat some vanilla. You have cats, right? I'd conceal all their stuff at the time, unless that would create worse problems.
Posts: 2010 | Registered: Apr 2003
| IP: Logged |
posted
I just had my house appraised yesterday so I know what you are going through. One of the things I did was not only ensure everything was neat, clean, polished, ect, but we hid anything that might even make us look like there was a potential for devaluing in the house (all alcohol cans, cat boxes, toy lightsabers(mine) ect...) They are looking for clues that might indicate whether underneath the clean carpet has been stained by drinks, or little things like that. If you can make sure those are all covered or if you don't have anything like that to worry about, then you should be fine. The appraisal for my house took maybe half an hour to 45 minutes, so its not all that bad.
Posts: 84 | Registered: Apr 2005
| IP: Logged |
posted
The house is pretty light (all the wood is light) and it is huge, so we haven't had time to "fill it up". I was planning to go around and pick up all the cat toys and hide them. The cats will probably be confined to the bathroom where their box is during the appraisal (and it will have been cleaned that morning). The front yard is still brand new, so there isn't anything to trim (though I will run through and clean up any construction trash from next door that's blown into the yard though. I'm going to run and buy curtain hold-backs today, so we can open up the curtains and let in the light. I'll also move stuff around a little, so unpacked boxes are consolidated and as out-of-the-way as possible.
Here you can see some pictures of the house, so you have a better idea of what it's like.
posted
I did some real estate appraisal in CT in the 90s. I wasn't a licensed appraiser, just did field work for a contractor to a town's tax department. One funny thing I noticed is that 90% of people apologize for their messy basements, even the ones that were spotless.
The stuff advised (cleanliness, smells, etc.) may have a small effect on the apppraiser, consciously or unconsciously, but not much. Though they certainly won't hurt.
The most important things I looked for were construction materials and quality, and square footage. Nothing you can do about those. If you have any extras he might not notice--saunas in basement, whatever--you could mention those in the beginning.
I would just try to be polite with the appraiser, make a little small talk, and let him do his job. Ask him if he wants you to show him/her around, or let him go around on his own if he wants.
It's your right to observe him, but it bugged me a little in appraising and surveying to be followed around. Try to save your questions till the end, as much as possible.
An offer of water or a soft drink is usually appreciated.
Good luck on the appraisal, ludosti! Let us know how it comes out, in general terms any way.
Posts: 6316 | Registered: Jun 2003
| IP: Logged |
posted
I'm glad that it's a pretty painless process and a quick one. I'm just bugging about it a little bit, since I won't actually be there for - my husband will be dealing with the appraiser, since I'll be at work. I'll be sure to tell him what you said, Morbo.
Posts: 5879 | Registered: Apr 2001
| IP: Logged |
posted
When do people usually get their houses appraised? We just bought our first one back in January, and I'm in the middle of doing a good bit of work on it (all new trim, fresh paint, opening up the kitchen to the living room and eventually doing new cabinets/countertops, other small things). When those are finished, should we get appraised, or is that something we'd only do when we were selling?
Posts: 1681 | Registered: Jun 2004
| IP: Logged |
posted
If you're having your house refinanced, that means that the lower the appraised value, the less you have to pay, correct? So, why would you want to spiff it up? Unless you plan on selling it soon, try to get the value as low as possible. Point out any and all problems to the appraiser. Does it have foundation issues? Have their been any hail storms that might have damaged the roof? etc.
posted
We had ours done today. No biggie. They are not trying to sell the house for you, and they will not be tricked by gimmicks. I knew he would see that our porch is falling apart, and that the house needs painting. We put a new kitchen floor in, and I mentioned that.
The thing is, we need the refinancing so we can afford to make the house look better, so what is the point in pretending?
We have a beautiful yard, we live in a hot real estate area, and it is what it is. The higher the appraisal, the higher our new mortgage, and the more we will have to pay.
[ April 12, 2005, 10:35 PM: Message edited by: Elizabeth ]
Posts: 10890 | Registered: May 2003
| IP: Logged |
posted
I am working at a mortgage company now, and we deal with appraisals all the time. Usually, as long as there is nothing majorly wrong with the house (roof, access problems, perked land, ...) there isn't much you can do to improve it.
Cleaning isn't usually going to make a difference, really.
People get their houses appraised for a number of reasons. Refinancing, selling a house, trying to get a second mortgage. buying a new house.....
Sometimes people have to pay PMI (Private Mortgage Insurance) if they own less than 20% of the value of their mortgage on the house. PMI can be expensive, and none of the money paid into PMI is tax deductible, and none of it goes to the mortgage balance at all. If the property goes up in appraised value , as it has been lately, then it is possible that a person could now have more than 20% equity even though they didn't when they bought it a few years later, just because the house is worth a lot more then they paid. If that is the case, people will get a new appraisal to prove that, and be able to drop the PMI, lowering their monthly payments.
posted
The best way that I can think of to get a house a' praised is to pretty it up and then have an open house. You're bound to get comments like "Oh, what a lovely house!" Posts: 1466 | Registered: Jan 2003
| IP: Logged |
posted
The man who came to our house could have cared less how pretty t was. He was looking at structure. How many closets? Where does the land line run? Fireplace? What kind of heating?
They also look at your neighborhodd. This is probably the most important piece. What do other homes in the 'hood sell for? Do you have town sewer and water?
The real estate agent will be more concerned with the details.
One thing to check, if you are selling, is the flow of water. Some people will come in to a bathroom, turn on the shower, and flush the toilet. If the water in the shower weakens, that is not good. Little things like that.
The appraisal, though, is based more on the solid stuff.
Posts: 10890 | Registered: May 2003
| IP: Logged |
posted
No, we're not selling it. We're getting it refinanced (like Kwea mentioned) to get rid of our PMI. The development is still fairly new - they're still building down the street from us. We're confident (based on the current price of our model of house) that it will appraise for at least $50k more than we paid for it (and we will therefore have enough equity to avoid paying PMI). It's obviously in really good shape since the house is only 6 months old (not enough time has passed for anything to have gone wrong yet).
quote: If the property goes up in appraised value , as it has been lately, then it is possible that a person could now have more than 20% equity even though they didn't when they bought it a few years later, just because the house is worth a lot more then they paid. If that is the case, people will get a new appraisal to prove that, and be able to drop the PMI, lowering their monthly payments.
I clearly had it wrong. But I'm confused as to how this works. Let's say that the house costs $100,000. In order to get rid of the PMI, you would need to have $20,000 in equity. If your appraised value increases by $50,000, making your house worth $150,000, 20% would now be $30,000. This is more not less. Could someone please explain where my thinking is going wrong?
Posts: 1947 | Registered: Aug 2002
| IP: Logged |
posted
Amanecer, you're looking at it from the wrong end.
Suppose you buy a house worth $100,000 (there aren't any in MY state, but there are in others) and put 10% down. Your mortgage is for the remaining $90,000.
Six months pass, and the house that was worth $100,000 is now worth $120,000 (that's awfully quick appreciation, but not unrealistic in some areas). You still owe almost $90,000 on the mortgage (since you pay almost exclusively interest for the first few years of most mortgages). But now that means you have equity of $30,000 -- the $10,000 down payment, plus the $20,000 appreciation. Well over 20%, and thus no more PMI.
Posts: 32919 | Registered: Mar 2003
| IP: Logged |
posted
"Suppose you buy a house worth $100,000 (there aren't any in MY state, but there are in others)"
Heavenly day, Rivka, you aren't kidding! My friends were lookng for a house in the San Fran area, and were seeing two bedroom ranches, on a slab, on a postage stamp lawn, going for 500-700,000 bucks.
Boston is getting up there now, too. People are moving all the way out here, about a two hour drive, and commuting in to the city.
Posts: 10890 | Registered: May 2003
| IP: Logged |
posted
rivka has it right....if your house goes up in value, YOU own that, not the bank....the bank owns whatever the mortgage is for, say 100,000...and if the house is now worth 120,000 then the increase in equity goes to the home owner.
A lot of people who are buying just for investment purposes go with what is know as an "interest only" loan, where they just pay the interest on the loan for the first X of years. It is possible for someone doing that to have an increase in value/equity due to rising housing costs, even though they have never paid a cent towards the principle.
Then they run around and sell it for a profit. That only works while interest rates stay low though, or rather as long as the housing market continues to rise.
quote:Heavenly day, Rivka, you aren't kidding! My friends were lookng for a house in the San Fran area, and were seeing two bedroom ranches, on a slab, on a postage stamp lawn, going for 500-700,000 bucks.
Boston is getting up there now, too. People are moving all the way out here, about a two hour drive, and commuting in to the city.
SLC is getting there, too. My parents are building a house, and it will cost them almost twice what their current house is worth to build a house with two fewer bedrooms. The lot is half of what the current house is worth.
Posts: 26077 | Registered: Mar 2000
| IP: Logged |
posted
My parents bought their house in roughly 1978 for $50K, it just appraised for $275K. Admittedly, they added a second bathroom and expanded the "master" bedroom, as well as did some kitchen upgrades. The average price in their neighborhood, according to the appraisers, is $220K.
Posts: 4515 | Registered: Jul 2004
| IP: Logged |
posted
We sould hear today what our house was appraised for.
Goody, that sounds just like my folks' house in Phoenix, except they bought it for 30,000.
It reminds me of an Onion article which cracked me up today:
"The Cost of Living Now Outweighs Benefits"
quote: To arrive at their conclusions, study directors first identified the average yearly costs and benefits of life. Tangible benefits such as median income ($43,000) were weighed against such tangible costs as home-ownership ($18,000). Next, scientists assigned a financial value to intangibles such as finding inner peace ($15,000), establishing emotional closeness with family members ($3,000), and brief moments of joy ($5 each). Taken together, the study results indicate that "it is unwise to go on living."
posted
I would include a warning for those that had or have to purchase PMI. You can drop that payment the moment that you reach the traditional 20%. It's likely that no one will notify you when you have reached that plateau so I would urge you to make sure that you aren't paying a fee that you don't need to.
Posts: 2022 | Registered: Mar 2004
| IP: Logged |
posted
punwit - It doesn't always work that nicely. It depends entirely on the specifics of the loan. With our current mortgage we could only apply to have the PMI dropped after 3 years. In our case, 3 years will be long after reaching 20%, which is why we are refinancing. I've heard that there are occasionally even loans that require you to reach 30% equity before dropping the PMI.
At any rate, you should always read the specifics of your loan. That way you know what's going on.
posted
We got the results back from the appraisal and I am quite happy. It appraised for $25k more than my hopeful estimate.
So yeah, now we'll have a nice chunk of equity (like 1/3 the value of the house). Not bad for our first house, less than a year, and putting down next to nothing down.
posted
Yeah, it all depends on the loan and who issued it as far as if you can drop PMI or not.
If you refinance you always can.
I strongly suggest looking into a 80/20 mortgage situation if it is necessary, at least all of what you pay towards both mortgages goes to the loan...most of PMI usually goes out the window and doesn't apply to the loan at all, although there are a few exceptions to that as I understand it.
Posts: 15082 | Registered: Jul 2001
| IP: Logged |
Printer-friendly view of this topic
![[Smile]](smile.gif)
![[Razz]](tongue.gif)
![[Big Grin]](biggrin.gif)
![[Party]](graemlins/party.gif)
