When homeowners refinance their mortgages, they must get an appraisal to confirm the home’s current market value.

While it’s easy to think that the appraisal process is completely out of your hands, there’s actually quite a bit you can do to make sure your home shines.

Read on to access our refinance appraisal checklist, which you can use to prepare for appraisal day.

Refinance appraisal: What is it and how does it work?

A refinance appraisal is a professional, third-party evaluation of your home to determine its market value.

Lenders require appraisals for home purchases and refinances (often called “refis”) to confirm that the property’s value supports the loan amount.

Appraisers evaluate the following factors to determine value:

• Location
• Comparable sales
• Condition
• Upgrades and renovations
• Square footage and layout
• Market conditions

Appraisals can directly impact your loan approval if the home appraises for less than expected.

They also are important for cash-out refinance loans, which allow you to borrow against the equity in your home.

Refinance appraisal checklist

Before you get an appraisal, there are several things you can do to make a great first impression and maximize your home’s value.

Prepare the exterior

The exterior of your home is the first thing the appraiser will see when they arrive at your property.

You can boost your curb appeal by making the following improvements:

• Mow the lawn
• Pull any weeds
• Trim bushes and trees
• Clear the driveway of debris
• Fix driveways cracks
• Clean out the gutters
• Repair cracks or damage to siding
• Repair exterior windows
• Power-wash the siding, driveway and walkways
• Consider a fresh coat of paint

Improve the interior

The appraiser will likely spend the most time inside your home.

To make sure your home looks its best inside, follow these simple steps to freshen up and fix any minor issues:

• Deep clean all surfaces, including floors, countertops and windows
• Declutter any excess items
• Fix leaky faucets
• Tighten loose door knobs
• Repair cracked windows
• Replace broken light fixtures
• Refinish or replace worn or outdated flooring
• Apply fresh coats of neutral-colored paint
• Test all doors, cabinets and other hardware to ensure they work smoothly

Make sure everything works

Appraisers look closely at whether your home is safe and everything works as it should.

Make sure everything is in working order by checking or replacing the following:

• Smoke detectors
• Carbon monoxide sensors
• Electrical outlets
• Light switches
• Faucets
• Showers
• Toilets
• HVAC system
• Kitchen appliances

Present recent upgrades and improvements

Your appraiser needs to know about any recent renovations or improvements to the home that can increase its value.

Keep records and receipts of all upgrades, including:

• Roof installation
• Kitchen or bathroom remodel
• Updated flooring
• Property additions

It also doesn’t hurt to prepare a list of recent sales in the neighborhood to ensure your appraiser doesn’t miss anything.

Do a room-by-room walkthrough

Once you have made all upgrades, updates and repairs, do a final walkthrough to ensure everything is functioning, clean and free of clutter.

Remember to tidy up the basement, garage and attic and ensure there are no safety hazards, such as exposed wires or unstable shelving.

Factors that affect your homes appraised value

Earlier, we briefly touched on the key factors appraisers evaluate to determine value, including the home’s condition and comparable sales.

Let’s break down each factor to help you understand the appraiser’s approach.

Property condition

The overall condition of your home is one of the most important factors in determining its appraised value.

Appraisers will look at the home’s general maintenance and recent improvements.

Factors such as cracks, foundation issues and broken appliances can harm your home’s value, while recent upgrades and repairs can positively impact it.

Local market conditions

The factors that are most out of the homeowner’s control include the broader real estate market conditions, such as:

• Supply and demand
• Interest rates
• Unemployment
• Inflation
• Neighborhood trends and developments

Appraised values may be higher in a seller’s market and lower in a buyer’s market.

Evaluating recent comparable sales in your neighborhood will give you the best indication of your home’s value based on local market conditions.

Comparable sales

Comparable sales, also called comps, are a key tool for appraisers to establish the market value.

They should ideally be within a one-mile radius of your home and share similar characteristics, including size, age and condition.

The appraiser will adjust based on differences between your home and the comps, including major upgrades or extra square footage.

Age of the home and recent renovations

Older homes can still be appraised for a high value; but they should be updated, well-maintained or possess a unique charm.

Generally, homes that have undergone recent renovations appraise higher than those that need upgrades.

Appraisers also look at the quality and function of the renovations.

Dont do this before your refinance appraisal

We’ve talked about what homeowners should do before an appraisal.Now, let’s take a look at what you shouldn’t do:

• Don’t overspend on unnecessary improvements or major renovations that may not give back in value what you put into your home.
• Don’t overlook the importance of decluttering, organizing and deep cleaning.
• Don’t ignore significant repairs such as roof issues, plumbing or safety hazards, as these will strongly impact your appraisal and the ability to refinance.

What happens after an appraisal?

Once the appraisal is complete, the appraiser will create an official report that includes:

• The appraised value
• Property description
• Photographs
• List of comps used to determine value
• Notes on upgrades or needed repairs

Once the appraisal is done, your lender will use the report to determine your refinancing options.

A successful appraisal can lower the loan-to-value ratio (LTV), allowing you to access a lower interest rate and term lengths better suited to your needs.

If your appraisal comes back too low, your lender will provide you with options and next steps.

Get started with Compass Mortgage

Ready to start the refinance process?

At Compass Mortgage, we’re here to help you every step of the way—making sure you get the best possible loan that fits your needs.

Apply online to start refinancing, or call us at (877) 635-9795 to unlock your personalized options.