The Most Common Appraisal Repairs: What You Need To Know

If you're preparing to sell or refinance your home, you are likely to need an appraisal - a professional assessment of your property’s market value. For an appraisal to go smoothly, certain repairs are often necessary, either to help increase the resale value or to meet the minimum standards for passing the appraisal. Understanding the difference between repairs that add value and repairs that help pass an appraisal can save you time, money, and stress.

 

Why Are Appraisal Repairs Needed?

Appraisers inspect your home to determine its market value, taking into account the property’s condition, location, and recent sales of comparable homes. For buyers using financing, lenders require an appraisal to confirm that the home’s value matches the loan amount. If the appraiser finds significant issues that might affect the home’s safety, functionality, or value, they may suggest repairs to meet the lender’s standards.

Appraisal repairs generally fall into two categories: repairs needed to pass the appraisal (essential for loan approval) and repairs to increase resale value (optional but beneficial for attracting buyers).

 

Common Repairs Needed to Pass The Appraisal

To pass an appraisal, your home must meet certain safety and structural standards. These aren’t optional if you want a lender to approve the buyer's loan. Here are some common repairs that appraisers often flag:

 

1. Structural Issues

Foundation cracks, sagging roofs, or water damage can signal structural issues, which are major red flags in an appraisal. Appraisers look for signs of instability or damage that could make the home unsafe. Fixing these problems is critical to passing an appraisal, as lenders won’t approve loans on homes with serious structural risks.

 

2. Health and Safety Hazards

Homes must meet basic health and safety standards. This includes fixing issues like exposed electrical wiring, broken windows, mold, or lead-based paint (especially in homes built before 1978). Unaddressed hazards could harm the occupants, so lenders require these issues to be resolved before approving financing.

 

3. Plumbing, Heating, and Electrical Systems

The home’s plumbing, heating, and electrical systems should be in working order. Appraisers check for obvious leaks, exposed wiring, and HVAC that is not working. Repairing these systems is crucial because a home must be habitable and meet basic living standards.

 

4. Roof Repairs or Replacement

A damaged or leaking roof is another common issue that appraisers notice. Lenders see a damaged roof as a significant expense that could affect the buyer’s ability to maintain the home. Ensuring the roof is in good shape helps avoid appraisal issues and provides future owners peace of mind.

 

When an appraiser finds something wrong, it is put into the appraisal in writing, and it’s written in legalese due to loan requirements. Sometimes this makes it hard to determine whether a repair is required or not - it all depends on how it is phrased. Learn more about how to determine what appraisal repairs are required.

 

Common Repairs to Increase Resale Value

While repairs required to pass an appraisal are necessary for loan approval, other repairs can boost your home’s resale value, making it more appealing to potential buyers. These improvements aren’t required to pass the appraisal, and won’t be documented by the appraiser, but they can make a difference when you’re looking to maximize your profit.

 

1. Cosmetic Updates

A fresh coat of paint, updated lighting fixtures, or new hardware on cabinets can give your home a more modern look. These low-cost changes enhance the visual appeal of your home, creating a great first impression on buyers without requiring significant investment.

 

2. Kitchen and Bathroom Improvements

Upgraded kitchens and bathrooms can significantly boost a home's value. Small changes like replacing old faucets, regrouting tiles, or installing new countertops can make these spaces more attractive. While these updates aren't necessary to pass the appraisal, they’re valuable for resale.

 

3. Landscaping and Curb Appeal

An inviting exterior can make your home stand out. Simple landscaping upgrades like planting flowers, trimming bushes, or adding outdoor lighting can increase curb appeal. Buyers may be more willing to pay a higher price for a home that looks well-maintained from the outside.

 

4. Energy Efficiency Upgrades

Adding insulation, energy-efficient windows, or smart thermostats can appeal to eco-conscious buyers and potentially increase resale value. Although these upgrades aren’t essential for passing the appraisal, they can be a smart investment for sellers looking to add value.

 

Knowing the Difference Saves Time and Money

Understanding the difference between repairs needed for passing the appraisal and those for resale value is crucial when preparing your home for the market. Essential repairs that address structural and safety concerns ensure the home is eligible for financing, making it possible for buyers to secure a mortgage. Meanwhile, optional improvements that enhance resale value can help attract buyers and may even boost your selling price.

If you’re unsure about what repairs to focus on, consult with a real estate agent or appraiser for guidance. By investing in the right repairs, you can meet lender requirements and increase your home’s appeal to potential buyers, helping you sell quickly and at the best price possible.

 

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