Tips from a lending expert:

Let’s talk about getting a home appraisal on your house.

Most home appraisals are done before refinancing or purchasing a home. Some are done for equity splits or insurance reasons as well.

The first question that most people ask us is “why do we have to have an appraisal done before I get a mortgage?” The simple answer is that lenders want to make sure that your home is worth the money they loan on it. If you were buying a $100,000 car from us wouldn’t you look at the Kelly blue book value before forking out the money?

We found a recent article in CNN Money Magazine from August 2012 and thought we would share the advice.

Appraisers say that homeowners often misjudge the worth of their home. Below is a list of some of the items an appraiser sees when they are summing up your property value and things you can do to increase the assessment.

1. Beautify the outside of your house. The Appraisal Institute states that adding curb appeal is the first step to winning over appraisers and buyers.  Overgrown plants/lawn and chipped paint on the outside of house will take as much as 3% off the value of your home.  It raises the question of; if this is what the outside is like what is the inside like?

2. Brand new roof.  This adds nothing to property value; however, a roof in disrepair or visible leaks will severely depreciate the value of your home.

3. Finished basement with half bath adds about 2% to the value.  But don’t expect it to count like a first floor remodel.

4. The market – two homes nearby went into contract above listing price. That adds nothing to the value of your home.  Appraisers go off of actual sales, so closed purchases.

5. Custom expensive built-in entertainment center is actually a negative adjustment. Why?  Cost doesn’t equal value.  Stay away from trendy remodels.  Renovations that are at all trendy — or not in keeping with the historical period of the home — will be assessed at the cost of ripping them out.

So how do you maximize your appraisal? Here are a few small projects that usually return dollar for dollar.

1.  Spruce up the landscaping;  add mulch, a few plants, put away tools, paint the outdoor areas, and fix any obvious problems such as torn screens, broken steps or a burned-out entrance light.

2.  Refinish existing wood floors

3.  Clean up your home interior, eliminate mold, mildew, stains and peeling paint, and put away clutter and junk.

4.  Rake or mow your lawn.

5.  If you have exposed sheet rock or studs, finish and paint this area.

6.  If you have water stains from an old roof leak paint this. Appraisers have to mention this in their report as a possible roof leak.

7.  Finish any construction or repair projects you have prior to the inspection.