Philadelphia Real Estate Appraisals
By Larry Flick, Prudential Fox & Roach, Realtors
How to Get the Best Appraisal for Your Refinance
As the credit freeze begins to thaw a bit and interest rates remain at record lows, many homeowners are looking to test the waters of refinancing once again. Larry Flick, CEO of Prudential Fox & Roach, warns homeowners, however, that a successful home refinance is contingent upon a favorable appraisal.
“A worthwhile refinance all begins with the appraisal, used to set the maximum amount you’re allowed to borrow against your home,” says Flick. “However, in today’s market, where we’ve seen price adjustments in many markets, home values have stabilized sometimes leading to inaccurately low appraisals.”
With that in mind, Flick advises following several steps when embarking upon an appraisal, many of which will improve your refinancing options and save you time and money:
Keep a close eye on fluctuations in the value of your home and the other homes in your neighborhood, paying careful attention to foreclosures in your area that may drive down the value of your home.
Choose your lender before committing to an appraisal as the lender will serve as the liaison between you and the appraisal company.
Appraisers use “comps” (comparable market sales) of local properties sold within the last six months to value your home. Make sure your lender, therefore, leverages their knowledge to research comps in your area before ordering the appraisal.
If using your own appraiser, do your due diligence and have your lender cross check your choice for any potential issues that may delay the process. A good loan officer will be able to confirm your appraiser’s credentials.
Request that your loan officer work with an experienced, local appraisal company. “Local appraisers have a deeper knowledge of the surrounding neighborhood and will usually be more accessible to keep the refinance process moving along,” explains Flick.
Make sure any major repairs are completed before moving forward with your appraisal and refinance. Structural damages will drive your home value down and can jeopardize the approval process for today’s popular government-backed FHA loans.
Rely on market value rather than tax assessments for a realistic appraisal value—in today’s market, tax value and current market value may differ widely, but your lender can only go by appraisal value.
“Homeowners must feel comfortable with their lender who will serve as their partner in the refinance process,” says Flick. “Homeowners should expect their lender to clearly explain the appraisal process and all the steps for refinancing up front.”
Blog post compliments of CenterCityTeam’s Philadelphia Real Estate Blog
Frank L. DeFazio, Esquire
Prudential Fox & Roach Realtors – Society Hill
530 Walnut Street, Suite 260
Philadelphia, PA 19106