Best of Q&A: How Are Comps Determined For Refinancing?
Each week we feature some of the many questions that come in to the REALTOR®.com Q&A section. Today’s question comes from North Haven, CT.
Q: We are having an appraisal done to determine our home’s current value for a refinance. Much of the advice I’ve been reading online has said to research your own comps to have an idea of how an appraisal will come back.
All of the online tools I’ve been using pull up the recent sales in the area of houses built somewhat close to the same year as mine. And this is where my question is. We gutted this house down to the studs and upgraded every single thing in it. So, comparing this home to other 1950′s homes in the area doesn’t seem accurate (or fair) to me. Does a Realtor take all of that into account when doing the comps? Or do they just stick with the year built when looking at comparable sales?
A: The appraiser will take into account that your home is upgraded and if the comps are in superior or inferior condition to yours.
They will make adjustments on the appraisal for that. Its not an exact science but usually it works. Generally, though, it’s not great to have the BEST home on the block, at least for refinancing purposes.
Make sure you give the appraisal a LIST of all upgrades, their cost and when they were done to have everything factored into your market value.