There’s no doubt about it, the period between accepting an offer and signing the documents at closing is a stressful one. Having to wait for inspections, appraisals, and all of the other things that are out of your hands can send stress levels through the roof. Doing things to speed up or improve the process can make you feel better but do they actually help? For example, does a dirty house affect an appraisal and will spending your time ensuring it’s sparklingly clean improve the appraised value of your home?
Does a dirty house affect and appraisal? No, a dirty house does not affect an appraisal. The appraiser looks at the square footage, the number of rooms, etc and not at your decor or cleanliness. BUT if a home is absolutely filthy it may signal, to the appraiser, underlying problems with a home caused by a lack of care and maintenance.
So, where is the line between a dirty house not affecting an appraisal, and a filthy home that can signal a problem? To understand that, first, we need to take a look at why a lender requires an appraisal, and what an appraiser does before, during, and after their visit. Then we can take a look at when a dirty house does not affect an appraisal, and when it could.
Why Do Lenders Want An Appraisal?
The reason for an appraisal is simple. When a lender is calculating how much to loan to a borrower that lender needs to know they’ll get the money back. In an ideal world, every borrower would make every payment until the loan was repaid. Unfortunately, this is not an ideal world and for a variety of reasons some borrowers may not repay their loans.
As a result, lenders require an appraisal. An appraisal provides an independent valuation of a property for the lender who will then only extend a loan up to the value provided by the appraiser. This way, if a borrower cannot repay the loan, money from the sale of the property will ensure the lender is repaid.
What Does An Appraiser Do Before Their Visit?
Before their visit, an appraiser will receive a file from an independent appraisal management company. These companies ensure that neither the lender, the borrower, nor the seller gets to choose the appraiser, and potentially influence the value in the final report.
Once they receive the file an appraiser will obtain a blank copy of the standard Uniform Residential Appraisal Report. This report form must be used by all appraisals where Freddie Mac or Fannie Mae will be involved in the mortgage but most appraisers use the same form for every appraisal regardless of who the report is for.
There are no rules about whether an appraiser does the background work of an appraisal, it can occur before or after the visit. As a result, I’m sharing the “standard” process which most appraisers follow.
After opening a file the appraiser will identify similar properties in the area which have been sold, ideally, in the past year and record them on the form. This gives the appraiser a good “feel” for the price band into which the home will fall.
They will also complete the first section of the form detailing the address, neighborhood, the amount of property taxes, etc.
On the day of the visit, but before entering the home an appraiser will take pictures of the comparable properties and the property for sale and mark them on a map, and create a hand-drawn sketch of the exterior of the building. This sketch will include exterior measurements and the calculations the appraiser used to arrive at the estimated square footage.
What Does An Appraiser Do During Their Visit?
During the visit, an appraiser will record a general description covering whether the home is detached, has an attic or basement, and the type of heating and/or cooling in the home.
A brief tickbox section requires the appraiser to record whether there are amenities such as a fireplace, fence, porch, garage, etc but does not require the appraiser to record or comment on the condition of these amenities.
The other section of the form asks the appraiser to record a description and condition of, among other things:
- Roof Surface
- Bath Floor
There are then short sections to describe the general condition of the property, and whether there are any adverse conditions that would affect liveability.
The appraiser does not record whether the carpet looks like it has been vacuumed today, whether the home is dusty if the windows have been washed or any other aspect of basic cleanliness.
What Does An Appraiser Do After Their Visit?
After the visit, the appraiser completes the rest of their form, contacts local authorities for permits and other information, researches the sales history of the property, writes up all relevant observations, calculates replacement and repair costs for the property and then gives their opinion about the value of the property.
They also compile all of the photographs, maps, sketches and other background information required to support their final valuation.
Does A Dirty House Affect An Appraisal?
A dirty house does not affect an appraisal. An appraiser is interested in the bone of your home. They look at the foundation and the roof, the walls, and the windows. The number, size, and position of the rooms are important, whether or not the walls have dirt on them or the bath could do with a good clean.
A “normal” level of dirt will not affect the process of the appraisal or the final valuation of your home.
When Does Dirt Become A Problem?
Although, generally speaking, a dirty house does not affect an appraisal, there are some occasions where it might.
The Offer Price Is Too High
Imagine a borrower has offered $400,000 for a home and similar homes in the area are a comparable price.
The home has not been cared for. The carpets are filthy and compacted with dirt. There are dishes with moldy food all over every surface in the kitchen, and the kitchen floor is buried under rubbish and food waste – you get the idea.
The house would need to be stripped back to the bare bones and renovated by a new owner so it would not be worth the $400,000, which is the price of a comparable home in average condition, offered.
In this case, if you were the owner of the home you would have to estimate the cost of ripping everything out and deep cleaning the remaining structure. Then you could compare the cleaning costs against the difference in value between a stripped out and cleaned home and a sold as-is home, and then choose the option that would make the most sense for you
Dirt That Prevents An Accurate Appraisal
If there are issues such as hoarding, combined with an excessive level of dirt and this prevents the appraiser from getting into a particular room or being able to see a specific aspect of the home then it can affect an appraisal.
The level of dirt required to have this kind of impact on the appraiser’s visit is unlikely to exist without other significant issues. As a result, the chances of the value of the home increasing as a result of a good clean are minimal.
Excessive Dirt That Causes Other Problems
Dirt that causes smells so pungent the appraiser cannot stay inside the home would affect an appraisal as would:
- Garbage which had piled up and placed excessive weight on a structure.
- Mold that has damaged the window frames, walls, floors, or other surfaces.
- Food waste which has attracted rodents which can, in turn, cause damage to the main structure, the wiring, and more.
- Other dirt which encouraged other forms of infestations.
- A level of dirt that obscures positive features such as a period home with original tiles that are in excellent condition under the dirt.
- Thick filth that, for example, covers a five-year-old high-quality hardwood floor and makes it appear to be a much older, low-quality floor.
Some real estate professionals will tell you that appraisers are “only human” and as such, they cannot help but take into account the cleanliness of a home. However, cleanliness is a relative concept. A home that is clean as far as one homeowner is concerned can be in desperate need of a deep clean in the eyes of another. So, whether or not a property is dirty is subjective.
In order to ensure that any appraiser going to a property would come up with the same valuation, the appraisal forms have been created to remove any element which could be subjective.
As a result, a dirty house does not affect an appraisal.
Helpful Information From Real Estate Professionals
Real estate appraisals are an integral part of the purchase and sale of property, particularly if the buyer is seeking funding from a lender. The appraisal value of a home can make or break a sale, so it only makes sense that so much weight is put upon it.
An appraisal consists of more than just the visit to a home. There’s a great deal of background research that takes place and this can take time. In addition, there is currently an extreme shortage of qualified appraisers which means the wait time for an appraisal to begin is becoming longer.
Pricing in real estate has little to do with what you paid for the property, or how much you spent improving it. Real estate values and rents are based on one thing: what buyers and renters perceive the value to be. Sometimes small changes will drastically impact the property’s functionality, or create an image of luxury, or simply make the property an easier place to live. In other cases, it’s about managing first impressions.
Most people have questions about the process and what the appraiser will review when he/she arrives at the home. Most people feel a bit anxious about the appraisal since we all want our belongings to have more value than when we first purchased them. Learn how to prepare your home for an appraisal.
About The Author
Geoff Southworth is the creator of RealEstateInfoGuide.com, the site that helps new homeowners, investors, and homeowners-to-be successfully navigate the complex world of property ownership. Geoff is a real estate investor of 8 years has had experience as a manager of a debt-free, private real estate equity fund, as well as a Registered Nurse in Emergency Trauma and Cardiac Cath Lab Care. As a result, he has developed a unique “people first, business second” approach to real estate.
This article has been reviewed by our editorial board and has been approved for publication in accordance with our editorial policy.