Top 5 Things Appraisers Look for To Value a Home
The appraisal is one of the last steps in a fruitful home sale. If everything goes well, the buyer will probably be able to arrange to finance and close on your home. However, if your home appraises for far less than what you anticipated, you may be forced to reduce the purchase price or, worse, lose the sale.
So, what do real estate appraisers look for? Here are the top 5 factors that they consider.
The General Neighborhood
When inspecting homes, appraisers frequently speak with neighbors to gauge their feelings about residing in the general area of the house.
Neighbors are a great source of information about the attractiveness and value of a particular area. For example, if you want to purchase a home, but most of your neighbours say the high crime rate in the region, you should factor that into your offer price.
Appraisers frequently use recent selling prices from other residences in the neighborhood to help them identify what is reasonable and fair in establishing comparable selling prices for their documents.
The Home's Condition
Another factor appraisers consider is the overall condition of the residence. They will inspect your home to ensure that it is rigid and free of problems that could jeopardise its liabilities, such as the establishment or roofing problems.
Appraisers will also check the condition of your siding, sewer lines, roof, HVAC, piping, and other systems. The estimate may suffer if they are old and in need of renovations.
Furthermore, appraisers look for indications that your home has not been appropriately maintained. If they notice flaws such as peeling paint, sheared rugs, smashed windows, or leaking pipes and faucets, the value of your home may suffer.
When evaluating a home, appraisers examine "curb appeal" and how a residence appears from the street concerning other residential properties. Although lot size and views are considered, having usable, clean, and appealing land adds to the appraised value and attraction of the home to potential buyers. In addition, window boxes, patio planters, and a new mailbox provide a lot of beauty without much labor or cost if you aren't seeking to overhaul landscaping completely.
The Property's Floor Plan
This is among the most important aspects of house appraisals. The appraiser can determine whether or not the home's areas lend themselves to valuable assets by determining how much area is well distributed.
In other words, possessing well-distributed space may increase the resale value of a specific property. This is because some buyers may want certain features present in their own homes. This is more about appearances.
On the other hand, floor plans are essential to appraisers because they can improve a property's market value. Consider the possible resale value when looking for a home, as having too much or too little floor area can make or break an offer.
Upgrades and Renovations
Certain additions and upgrades can help to raise a home's value. A new kitchen, refurbished bathroom, renovated basement, and freshly installed landscaping, for example, can increase a home's value. Therefore, when determining the home's value, an assessor will consider these changes.
Type Of Construction Materials Used
The kind of materials utilised to construct the home would also be considered. A home with higher-quality and more contemporary finishes will be worth more than one built with low-quality, dated materials. Updating materials can help a homestay in better shape while also enhancing its efficiency and degree of safety.
Materials and worn or damaged sections are included on appraisal checklists, as well as whether your property is concrete or wood-sided are considered. For example, brick is prized for its insulation and high durability. However, sections of deteriorated inter-brick cement and gaps in between the foundation and exterior walls may require patching to improve the look. Another instance where siding can add value but is not necessary for safety purposes is replacing aged wood with siding. Another modification that can add value to an older property is adding insulation between outer and interior walls and repainting the weathered exterior of the siding.
Before displaying a home, power-washing the exterior is recommended since it is a reasonably low-cost project that may dramatically improve the home's appearance by cleaning accumulated debris from small cracks. If the sealing and framing are worn out, replacing the windows is a good idea; however, it's one of the pricier home improvement chores. On the other hand, potential purchasers prioritise decent window conditions on their wish lists.
Bedrooms & Bathrooms
Before spending $20-30 thousand or more on a bathroom, seek professional advice to ensure that the upgrade would pay for itself based on the appraised value. You may break even by adding a newly designed bath addition to a home that has declined due to the location or market prices, but you might not.
Another item to think about is the bedrooms in your house. When is the bedroom no longer a bedroom? When it comes to selling, some properties have rooms with no closets, and the owners discover that space without a closet cannot be represented as an extra bedroom. It's only fit for a study or an "extra" room.
Temperature & Appliances
Home evaluations consider the age and efficiency of appliances, heating, ventilation, and air conditioners (HVAC) units, power components, and drainage. Unfortunately, replacing older appliances isn't always cost-effective for many people wanting to sell their homes. Still, assessment value is unlikely to decline when everything is in good condition, clean, or has a track of servicing and even warranty documents. However, if things are in bad form or aren't working correctly, it could have a negative impact on the home's value. Positive improvements include new appliances and update supporting fixtures, including ducts and pipes.
A Final Word
This article enlisted the factors which appraisers look for during home valuation. These include the general neighborhood, the home's condition, the residence's floor plan, the materials used in the home's construction, bedrooms, and bathrooms, as well as temperature and appliances.
The Appraisal Process does not have to be scary. That’s why our team at JS is so committed to serving our clients through-out the process. We want to make the home buying or selling experience one that preserves the excitement but sheds the anxiety. We provide clear guidance and advice to help you find the right home, at the right price, in the right neighborhood. Download our FREE planning kit and connect with us today!