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Housing Appraisal Issues in California

As home values have started to stabilize in markets across the country, low appraisals are becoming a bigger problem for many would-be buyers.Appraisals are required in order to buy or sell a home. The purpose of an appraisal is to ensure that the purchase price of the home is correctly aligned with the actual value of the home. Appraisals are often based on property value, home improvements, and recent sales prices of comparable properties. And in rising price markets, the sales prices of comparable home might not be high enough to support the newest deals. This is a particular problem in the West, California has reported significant appraisal problems."We are seeing higher price appreciation and are starting to run into appraisal problems," said Charlie Young, chief executive officer of ERA Franchise Systems, a firm with a national network of real estate brokerage offices.Recently, the federal government issued new rules aimed at improving the appraisal process as it pertains to high-interest mortgages on rapidly appreciating homes. However, these rules don't go into effect for a year, and don't apply to most conventional loans, so they won’t make a difference for most homeowners.Here are a few ways you can boost your appraisal:Pick a LocalChoose an appraiser who lives within a 10-mile radius of your property if possible. If the appraiser doesn't know the area, there is a bigger chance that the appraisal will come back inaccurate.Do Your HomeworkIf it is not possible to find an appraiser in your area, do the homework yourself and provide the appraiser with as much information as you can about the quality of your neighborhood. Provide your appraiser with at least three solid and well-priced comparable properties. You will save her some work, and insure that she is getting price information from homes that really are similar to yours.Rethink Renovations For those looking to add value to the home, start with the kitchen and bathrooms which add the most value and appeal. Wood floors, landscaping and an enclosed garage can also drive up appraisals.When you make improvements to your home, document what was done with before-and-after photos, and a detailed accounting of what was spent. This can be valuable information to an appraiser.Don't forget to highlight all-important structural improvements to electrical systems, heating and cooling systems - which are harder to see, but can dramatically boost an appraisal.Clean UpAlthough we all know not to judge a book by it’s cover, we all do it…even appraisers. It is easy to be swayed by a good looking yard or a well-organized kitchen. Get rid of the clutter, clean up, pick up, and organize your space to maximize the appeal. A clean house appears larger, nicer, and more appealing.

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