I need the most $$ from my home appraisal...

[Not so Dumbo]

We are in the process of refinancing our mortgage and were just waiting to hear from the bank on when our closing date was when we got a call from them saying there has been a snag in the process and now we need to do another home appraisal. We refinanced before in 2007 and they were going to use that home appraisal but now they claim they need a new one, and here's the kicker, it has to come in at $3000 more than it did in 2007 or we will end up having to pay more out of pocket at closing, why I'm not really sure.

We are planning a trip to Disney in November and if we end up having to pay
and extra $3000 to refinance we will have to cancel our trip.
So my question to all you savvy home improvement folk out there is, what are somethings I can do to increase the value of my home?
The things that we have already finished since the last appraisal are: relandscaping the front of the house with more stone, plants, small Japanese maple tree. Also redoing two flowerbeds in the front yard with landscaping blocks instead of the black plastic edging that was there before. Lastly, putting slate tile up on the backsplash in the kitchen.

Any advice would be greatly appreciated

 

[ajk912]

What state are you in? Maybe some local peeps will have some ideas about what works in your area.

Otherwise..I don't know what to think. Trying to appraise HIGHER than the height of the market might be a tall order.

 

[Janet Hill]

Unfortunately, the biggest factor is comparable sales in your area. If there were a lot of short sales or foreclosures in you neighborhood it could be a problem.

 

[Mickey527]

There really is nothing you can do physically to make the house be worth more. It will be worth what other homes in your area are worth. it all depends on the amount of rooms, size of property etc...
I just refinanced and also needed the home to be worth $20,000.00 more than the homes in the area were worth. I didn't think it would be since I had gutted my kitchen and living room and hadn't started re-sheetrocking or anything.
I told the assessor that in order to qualify for the mortgage the house had to be worth at least $*****. He just kept saying "well see waht I can do for you". I was amazed that when I got the assessment it was over what I had told the assessor and about $50,000 more than the neighbor's house next door. I was told that I coudl sell it for the amount he had written AS IS!. Boy if I had a buyer I would have taken that and run really fast.
I would just tell the assesser when you walk around with him that it has to be worth $**** and you can't get the mortgage etc.... I don't know if he did up the amount but I was suprised at the price of my house, maybe he will over assess for you too.

 

[msmayor]

I would just tell the assesser when you walk around with him that it has to be worth $**** and you can't get the mortgage etc.... I don't know if he did up the amount but I was suprised at the price of my house, maybe he will over assess for you too.

There is NO legitimate appraiser who will value a home incorrectly just to make you happy...he must base it on factual information (comparable recent sales) and costs per square foot in line with your area. He cannot (and should not) inflate the value simply to make sure your loan goes through.

Unfortunately, the market in many areas has softened significantly and the drop in housing values coupled with more stringent loan requirements is making it harder for many folks to refinance without out-of-pocket costs.

There is little you can do at this point to significantly increase the value of your house. Cosmetic improvements (landscaping, painting, etc.) won't sway an honest appraiser.

Good luck; I hope it works out for you.

 

[StitchandPooh'sMom]

My understanding of the process (which is limited) is that you will be subject to comp sales, square footage, views, etc., that you can't do much about. I would expect an appraiser to downgrade your value if it were seriously in need of repair, but repainting and other cosmetic items won't do much for you.

I do think landscaping adds to the market value of your house, within reason. If you were previously under-landscaped compared to your comps, then your value should be adjusted if you are now landscaped similarly. You also might get some "credit" if you are particularly well-landscaped with respect to the comps, but that is more of a subjective measure.

We recently refinanced, and the appraiser asked what changes had been made since we built the house, since he had pulled up the purchase price. Be sure to tell the apprasier what you have done to improve the property and hope for the best. Be sure to mention the tile backsplash and any trees you purchased.

2007 was the peak of the housing market around here - our house appraised for more than I expected and more than when we built it in 2005, but it was probably worth more in 2007. It just depends on the market in your area.

Good luck!

 

[lastminutemom]

Hi. Appraisors are being very conservative these days because they don't want to be blamed for foreclosures.

Have you researched yourself the sales of similar homes in your area?

 

[wall*e2008]

OP the "upgrades" do not sound like nearly enought to get it $3K more than 2007, when the bubble was at its peak. Did you pull our money from the last refi and will you be pulling our money for this refi? If so, what did you do with the last refi money and what will you be doing with the new refi money?

 

[Not so Dumbo]

What state are you in? Maybe some local peeps will have some ideas about what works in your area.
:/QUOTE]

We are in Michigan

2007 was the peak of the housing market around here - our house appraised for more than I expected and more than when we built it in 2005, but it was probably worth more in 2007. It just depends on the market in your area.

Good luck!

2005 was the peak of the market around here. In 2007 when the last appraisal was done it had already begun to show the decline.

OP the "upgrades" do not sound like nearly enought to get it $3K more than 2007, when the bubble was at its peak. Did you pull our money from the last refi and will you be pulling our money for this refi? If so, what did you do with the last refi money and what will you be doing with the new refi money?

We broke even on the last refi and the plan was to only gain $1000 from this one. The lower interest rate is our motivation for refinancing.

Only other thing that may be to our advantage is that current tax assestment on our house has it valued at $22,000 more than what we need the appraisal to come back at. We tried to have that assesment lowered this year and they originally had it set higher than that. This was as low as they were willing to lower it.

 

[wall*e2008]

We are in Michigan

This really concerns me. All we keep hearing from other MI DISers is that house prices are plummeting and about all the houses in foreclosure.

 

[minniebeth]

Unfortunately, the biggest factor is comparable sales in your area. If there were a lot of short sales or foreclosures in you neighborhood it could be a problem.

We are in the same boat with trying to refi. and this is what is affecting us. We had two foreclosures on our street alone which REALLY hurts us and quite a few more in our development.
It's tough...

 

[kydisneyfans]

We are having similar problems in KY. We had a "drive by" appraisal come in at 160K, we had a market analysis done on our house last December that came in at 177K. One house that is the same model as ours sold for 142K where the owners had trashed it inside and needed repair before anyone could move inside. Ours had been compared to that number, which isn't right. We asked for a walkthrough appraisal and have that coming in a week or so. Since the driveby appraisal, 2 more homes have sold for close to 170K and another has been put up for sale for 175K.

 

[flakypuff]

We are in the process of refinancing our mortgage and were just waiting to hear from the bank on when our closing date was when we got a call from them saying there has been a snag in the process and now we need to do another home appraisal. We refinanced before in 2007 and they were going to use that home appraisal but now they claim they need a new one, and here's the kicker, it has to come in at $3000 more than it did in 2007 or we will end up having to pay more out of pocket at closing, why I'm not really sure.


We are planning a trip to Disney in November and if we end up having to pay
and extra $3000 to refinance we will have to cancel our trip.
So my question to all you savvy home improvement folk out there is, what are somethings I can do to increase the value of my home?
The things that we have already finished since the last appraisal are: relandscaping the front of the house with more stone, plants, small Japanese maple tree. Also redoing two flowerbeds in the front yard with landscaping blocks instead of the black plastic edging that was there before. Lastly, putting slate tile up on the backsplash in the kitchen.

Any advice would be greatly appreciated

My DH is a Appraiser. The only thing I can tell you is everyones values are lower. Some are not happy Well...ALL are not happy.
My DH feels bad for the people that need the value to come in at a certain price (us included) but the banks are very careful now. Every ajustment needs to be proven. The cosmetic updates dont do much for the value unless lets say the house was in poor shape and the org. appraisal showed a minus value...only in this case will that work. Lets say the landscaping was not done at all and there was a neg...maybe -3000. If you then go ahead and
do that lawn, shrubs then the value will increase.
Things that do add value...new kitchen update, new bathroom, hardwood floors or tile in the kit or bath. Even a new deck..finshed basement,attic...I hope this helps. There is some wiggle room as far as opinions....3000.00 is a little high now. One more thing...Please dont put the appraiser in a spot. "I will not get my loan if you dont make it a certain price" It doesnt work

There really is nothing you can do physically to make the house be worth more. It will be worth what other homes in your area are worth. it all depends on the amount of rooms, size of property etc...
I just refinanced and also needed the home to be worth $20,000.00 more than the homes in the area were worth. I didn't think it would be since I had gutted my kitchen and living room and hadn't started re-sheetrocking or anything.
I told the assessor that in order to qualify for the mortgage the house had to be worth at least $*****. He just kept saying "well see waht I can do for you". I was amazed that when I got the assessment it was over what I had told the assessor and about $50,000 more than the neighbor's house next door. I was told that I coudl sell it for the amount he had written AS IS!. Boy if I had a buyer I would have taken that and run really fast.
I would just tell the assesser when you walk around with him that it has to be worth $**** and you can't get the mortgage etc.... I don't know if he did up the amount but I was suprised at the price of my house, maybe he will over assess for you too.

I am glad to hear it worked out. The reason he said "We'll see is because if he says "Yes it will" then he can be sued.

 

[thelittlemermaid]

I feel your pain! Since all of this has happened, we owe WAY MORE then what our house is worth. Then to top it off, we had a foreclosure across the street {who knows how many more around the neighborhood} and now it looks like the same house {of course different owners} might be going back into foreclosure. Plus we also have a house across the street that is a duplex that has been up for sale for about a year and a half. Who ever owns it has been renting each side out and these people are something else on each side. They don't care about ANYTHING! Plus they give me the creeps!!! While talking to a neighbor I also found out that on our side of the street there are also two more rental props that have been around before we bought our house. AAAAHHH!!!!! Sure wish DH and I would have known about all these rental props, then there is no way I would have had said yes to the house we're in. Knowing this was going to be a house we were going to have kids in, I don't like the idea of people being able to come and go out of these rentals all the time and not knowing WHO might be living there with kids around. So basically we are stuck!

Ok, got off topic. LOL!!! I wish you alot of luck!

 

[Kriii]

Well, I do wish you luck. The house we just sold appraised for 15K lower than we paid in 2005 AFTER we put about 20K in improvements into it. I don't think anyone's home is increasing in value right now.

 

[Glenn]

Having been in lending the improvements you mentioned might help sell a house but will not bring up the value unless the comps have sub par landscaping. Have you done any improvements since 07 that cannt be readily seen, new electrical panel, new AC, insulation, new windows or other items? If you have mention these & have the paperwork to prove it too. With todays market & regulations appraisers are under lots of oversite to produce a sound, documented and defenseable report. Do you need the additional value to include your closing costs in the loan?

 

[snarlingcoyote]

Wayyyy back in 2005, I was told to make coffee and cake, be friendly and point out that the kitchen had been rehauled, the appliances were newish, and that we'd replaced the carpet and put laminante down. I made sure he saw the new landscaping and the new hardware on all the bathrooms and all the brand new light fixtures and even pointed out that the RV shed/shop had a new roof.

All of this was done on the cheap - I found the name of the guy in town who put in most of the carpet in apartment complexes and had him carpet the entire house in standard apartment complex cream colored carpetting. We bought water-proof knockoff laminate flooring at the discounter hardware store and put that down ourselves. I re-did the kitchen cabinets myself. The appliances were within 3 years old, but had been bought second hand (except for the dishwasher, which we bought on deep sale + a 20% off coupon courtesy of the USPS). I did the landscaping and put the hardware on in the bathroom. DH installed the light fixtures (discounter hardware store, yard sales, and watching the hardware stores' sales). DH and his buds put the new roof on the RV shed/shop one weekend. (Roofing is hot, hard work, but it's not really complicated. . .and he still owes some buds when they want THEIR houses reroofed, LOL!)

He noted all of this and the house was appraised fairly high.

Now. Who knows.

I would say anything you can replace or learn to replace yourself, do it - after you've located a discount or second-hand hardware store and priced out the nicest for the cheapest - not the one you want, just the one that will look the most expensive in your house. Any older appliances? Start hunting for used-but-newish or new-but-minorly-dinged or something of that ilk and replace it.

Toilets, sink and tub hardware, lights and plugs. You can put down your own laminate, and price out cheap, but sturdy carpet. You can put down your own tile, molding and kickplates. Rehang doors, and touch up paint.

(I wouldn't recommend the roofing thing unless you know someone who knows how to roof and is willing to teach you. It's not that hard to learn, DH swears, but it's also not something I think you can learn in a 2-hour class at Home Depot.)

In the end, it might be all for naught though. So I'd go to Zillow FIRST and see what houses in your neighborhood have been selling for. If it's close, well, you can but try. If it's not, I don't know if I'd bother.

 

[Mickey527]

Well, I am hoping that I had an honest appraiser as other say they must be. I really didn't think my house was worth what the appraiser did appraise it for, but I guess it must have been.
A neighbor who's friend wanted to buy my house told me that the appraiser was paid by the bank and since the bank wanted to make money on taxes that they did appraise higher than it was worth. She said this because she wanted me to sell to her friend for less than the appraisal. I told her that banks don't get to keep the tax money so they couldn't care less on how much taxes I pay. They only get what the house is worth and they won't give me more than they can sell the house for if I can't pay and they take over the mortgage. But again, the appraisal was done in Jan. I dont' know how much more the market had dipped in the 5 months since then.
So, I guess my house is really worth what the appraiser said.
I did redo the entire house, knocked down the plaster walls, put in insulation, redid all the electrical and put up sheetrock. The living room is done now and the kitchen is being rewired this week so I can do the sheetrock and put up the cabinets I bought over 3 years ago when Home Depot sold them on clearance.
I also am getting the oil tank dug up this week and a new on demand hot water heater installed.
Anyone want to buy a 4 bedroom house in Bridgeport, CT? I would love to sell and move to FL!

 

[canadianjovigirl]

We just went thru this but are in Western Canada where the situation is a bit different than alot of the US, but prices here have decreased greatly also.....our appraisal from Dec. 2007 was $421,000 for our home and we just had one done 3 weeks ago and the appraised value was $310,000 dispite our tax assessment saying $435,000......not much we could do with the bank, but i did appeal our tax bill and saved $1000 per year on taxes. Our banks here hire the appraisers, we do not get to pick and due to slow sales and lower prices all the prices seem to come in way lower than the past few years....we still got our new mortgage and a lower interest, but thankfully we were not trying to pull money out to pay off debt or anything or we would have not been able to....

Our appraiser when i questioned the low value stated "Appraisals have to be a market value a bank could realistically receive if they had to sell your house within a 60-90 day time frame due to foreclosure thus the reason people seem to think they are a bit on the low side"

 

[kami2199]

Don't tell the appraiser what you need...an honest appraiser will not go for it. Tell them what updates you have done and let them take all the time they need to make their inspection. Don't try to hide anything from them as it's pretty obvious to most good appraisers when something isn't quite right.

Appraisers are absolutely not allowed to have a value conversation with the borrower unless specifically told to do so by the client...the lender. Most appraisers still won't want to do this and most lenders don't allow it anyway. They are not going to know what your house is worth when making the inspection. Don't ask for a ballpark. Don't answer the door in your nightie. Don't bake cookies for them. Yes, I've seen it all.

An appraisal is an opinion of value. It wouldn't be uncommon to have two slightly different values from two appraisers. Depending on the type of neighborhood you live in, you could have two appraisals with the exact same comps, or two with totally different comps. Both sets of comps should be an accurate reflection of your home though. You will find in rural areas, comps might be few and far between and possibly not all that similar to your house because there is nothing to choose from. In other places, you might have three comps that are duplicates of your home with a few exceptions/upgrades. Just depends on the area.

Due to new regulations, appraisers for any secondary type loans can no longer be chosen by the loan officer. More lenders are moving towards appraisal management companies and you might find that the fee on the closing statement is $500 even though the appraiser only got $300 of that (or insert any other amount). Don't call the appraiser all pissed off at the amount charged if you think it's too much - take it up with the lender and find out how much the management company took of that fee.

None of this is directed at the OP by any means - just want to get it out there as I know a lot of refi's are taking place right now. Oh - Zillow.com is a joke. A realtor market analysis or BPO isn't the same as an appraisal and should not be confused with one. Some realtors are awesome when valuing a home, most are not - sorry Realtors, it's the truth. There is so much more than just picking three houses and making a few adjustments. Realtors do not have the training that most appraisers have or should have. Some do, most don't. Also, don't rely on assessed value as what your home is worth either.

Good luck to those refinancing.