If you’re refinancing your mortgage, you’ll likely need to get your home appraised. A home appraisal protects your lender in case you default — they’ll know your home is worth at least as much as your loan. A higher appraisal can also qualify you for a higher refinance loan.
Let’s look at how to get the best appraisal on your house to qualify for a bigger loan. Below, we’ll share how appraisals work, five tips for how to get a high appraisal, and what to do if your appraisal comes back lower than you expected.
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Do you need an appraisal to refinance?
First, verify that you actually need an appraisal to refinance. For example, you don’t need an appraisal for streamline refinancing for Federal Housing Administration (FHA) loans and interest rate reduction refinancing for Veterans Affairs (VA) loans.
Some lenders may waive the appraisal requirement if your last appraisal was relatively recent (typically within the last year). Waiving the appraisal requirement is at the lender’s discretion. Alternatively, the lender may simply require what’s known as a “drive-by appraisal” where the appraiser inspects only the exterior of the property.
How to get my house appraised
Before you can learn how to get your house to appraise for more, you should first understand what appraisers are looking for. Appraised value is different from market value, which is determined by whatever buyers are willing to pay for your house at any given time. If you want to know your home’s market value, you can request a comparative market analysis from a real estate agent.
Appraisals are determined less by buyer demand and more by a given set of factors that appraisers look for. Those factors include:
- Location
- Square footage
- Overall condition
- Comparable sales nearby
- Market conditions
- Major renovations/remodels
Unfortunately, many of these factors, such as square footage and market conditions, are beyond your control. So, the amount you can actually increase your home’s appraised value is limited without substantially investing in renovations.
Keep in mind that when applying for either a refinance or a new mortgage, neither you nor the lender can handpick the appraiser. This is to ensure the appraiser remains independent. Your lender will typically pay an appraisal management company (AMC), which will then choose an appraiser.
What’s the difference between a refinance vs. purchase appraisal?
The appraisal for a refinance is mostly the same as the appraisal you would get when purchasing a home (also known as a fair market appraisal). The only difference is that when purchasing, the appraiser usually knows what the purchase price is. In this sense, they have a figure to start from.
With a refinance, the appraiser doesn’t have a sale price to work from. In theory, this shouldn’t affect the appraisal, but it does mean that the refinance appraiser is working with a bit less information.
How to get the highest appraisal on your home
1. Ensure your appraiser has access to comparable sales
One of the main factors determining a home’s appraised value is the selling price of nearby comparable properties (called “comps”). There’s no need for you to supply comps — the appraiser will research them. However, if you feel there are certain nearby sales that are especially similar to yours, you can draw the appraiser’s attention to them.
In some cases, your appraiser may not have a complete picture of the homes that have sold in a particular area. As an appraiser on Reddit notes, “Not all sale prices are disclosed or make it to the MLS. You find that happening a lot more with million dollar properties, [than] you will [with] lower priced homes. They may be private listings in the MLS. These are listings that do not show up in a regular search of the MLS.”
Be sure to highlight any private listings in your neighborhood that the appraiser may not be aware of. That will give your appraiser a more accurate picture of what homes similar to yours are selling for.
2. Wait for the market to improve
Appraisals are largely based on the current real estate market in your area. While you can’t control the market, you can choose when to apply for refinancing. If housing prices are currently down in your area, you may want to wait before getting an appraisal.
Timing the market is notoriously difficult, and there’s no guarantee that housing values will increase at any given moment. However, a real estate agent may be able to give you a general idea of market trends. By talking to a real estate agent, you can make a more informed decision about the health of the market and learn how much your home is worth to buyers.
3. Invest in major renovations
Major renovations can have a significant impact on your appraisal, especially if they add to your home’s square footage. An appraiser on Reddit says, “Anything that changes the floor plan would certainly be considered major. Other things we take into account are things like kitchen and bathroom remodels. Think like taking a 70s kitchen with yellow wallpaper and adding tile backsplash, new granite counters, stainless appliances, light fixtures, etc. Basically anything that is more or less rebuilding a room.”
Of course, major renovations are expensive, so they may not be a practical choice. And even if you can afford a major renovation, there’s no guarantee the investment will be fully reflected in the appraisal.
Also, not all renovations are created equal. For example, a finished basement won’t necessarily count toward your home’s square footage depending on the state and county you live in. Before investing in a major renovation, consult an appraiser to learn what renovations have the biggest impact.
4. Clean your home
When it's finally time for the appraiser to take a look at the property, it's important that you present it in the best possible light. The easiest way to do that is by decluttering your house and cleaning it thoroughly.
Technically, cleaning your home doesn’t have any effect on its appraised value. However, appraisals aren’t an exact science, and presenting a clean house certainly doesn’t hurt. At the very least, it makes the appraiser’s job easier.
As one homeowner on Reddit says, “We refi'd in 2022 and weren't expecting the appraiser to come inside, but he did. With 3 kids, the place was a mess. It's not supposed to [affect] the appraisal, but it came in super low, even from a comp perspective. We got a second appraisal and put some effort into straightening up, and it worked in our favor.”
5. Complete budget-friendly cosmetic improvements
Similarly, cosmetic improvements don’t have much impact on your home’s appraised value, but they also don’t hurt. As an appraiser on Reddit points out, “Appraisers aren't looking at your decorating skills, but you can't say there's zero impact when a home is in great condition.”
You shouldn’t invest too much money into improvements that are unlikely to significantly impact your home’s value. But budget-friendly improvements, such as a fresh coat of paint, are low risk and at least have the potential to make a good impression on an appraiser.
How to increase the appraisal value of a home
If you’re not happy with your appraisal value, you have a few options. You can ask your lender if they’re willing to send a new appraiser, although they’re under no obligation to do so. You can also apply for refinancing elsewhere, which will likely lead to a new appraisal.
You’re also free to dispute an appraisal. However, the chance of the appraiser adjusting the amount is low unless you can provide evidence that their calculations were off. For instance, if they got the square footage wrong or missed some highly relevant comps.
Whether you get a new appraisal or dispute your existing one, be realistic about how much you can actually increase your appraisal by. As one appraiser writes on Reddit, “There seems to be a common misconception among homeowners that every little detail adds to their home’s value, but this simply isn’t the case. There are only a few main factors that really contribute to your home’s value.”
Looking at home value estimators can give you an idea of what homes are worth in your neighborhood. Just keep in mind that these estimators can differ significantly from appraised values.
You can also talk to a real estate agent about what your home is worth on the open market and what renovations could be the most impactful. Clever Real Estate can introduce you to top local agents who can help you understand the real estate market and how to increase your home’s value.