There are many reasons you might want an appraisal; a refinance, new home purchase, or maybe you’re considering selling and you need to know about what the home is currently worth. Appraisals can range anywhere from $300-$800 depending on the fees and the type of appraisal you’re getting.
I recently helped a friend of mine do some repairs and upkeep on her home because she had applied for a refinance and was getting an appraisal in the next couple of weeks. The lender has to choose the appraiser in this case and because she doesn’t know what the appraiser will exactly look for, we worked hard into the night correcting as many things as possible and fixing up the home to be in its best condition.
This got me thinking as to what type of items and appraiser would look for when appraising a home. Is a homeowner supposed to completely update or upgrade the entire house including appliances, flooring, fixtures and materials in order to get the best price? Well, it depends on how much you really want out of the house. If it’s a refinance, you want the home to be valued as high as possible. If you’re buying the house, a decent to lowball amount will get you a better deal. If you are selling the house, you want the most money possible.
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There are three main parts to an appraisal; the inspection, research of comparable properties, and the appraisal report. The inspection is when the appraiser actually visits the house. They then compare similar properties in the area that have sold within the last 3 to 6 months if there are properties that can not be compared in that time. The appraiser then writes up the report stating the final appraisal amount.
Now, while appraisers don’t really care that you might have dirty laundry on the couch or kids toys across the floor, they will take into consideration the structure, the amenities of the property, the condition of the property and any upgrades.
If you’re planning on an appraisal here are some things that you can do to increase the value of the home.
#1. Don’t neglect the outside. Trim the trees, mow the lawn, and make it generally inviting for anyone, including the appraiser, to visit. Make sure that the appraiser has easy access to the front door and that door knobs, doorbells, door jams, and frames are all working correctly and in good condition.
#2. Make sure most items work. This means make sure that all the light switches work, plug-ins and outlets and that doors and windows can open and close freely. Double check that all appliances are working and that any permanent pictures inside the home such as plumbing and lighting fixtures are protected, correctly installed and work.
#3. Amenities. Amenities might include hot tub, smoke detectors, central air-conditioning, baseboard heating, attached or detached garages, fireplaces, intercom systems, security systems, solar panels, pool, or a gazebo. All of these items can either add to or take away from your price depending on the comparable properties in the area. For instance: if there were two properties absolutely identical but one has solar panels and one did not, there would be an upgrade in the value because of the solar panels. However, it will also depend on which property has sold. If the property with the solar panels sold first, then your property would be downgraded because there are no solar panels.
#4. Upgrades. If the home still has all the builder grade materials and low quality to average finishes and appliances, the home will not get as high of a value as a property that is had upgraded or updated materials and appliances. If the home has the highest quality washer and dryer, dishwasher, oven, refrigerator, heating system or other items that are usually permanent fixtures in the home, these will increase the value of the property.
#5. The structure. The general structure of the home will also be evaluated. Appraisers will look at the foundation, siding condition, and roofing. They will determine the quality of each of these items and look for cracks, leaks, defects or damage around the exterior of the home. This again will increase or decrease the value based on comparables.
#6. Cosmetic. Even though cosmetic items are not high on an appraisers priority list I’m still going to mention that. If everything is in top-notch condition when it comes to the structure, appliances, fixtures and finishes but yet the paint is peeling off the wall, there are scuffs on the floor boards, gouges in the hardwoods or it’s just a dirty house, this will negatively affect the appraiser’s value. If the home is clean, cosmetically put together and all of the other items are taken care of, you’re more likely to get the highest possible valuation for the home.
NOTE: As in the case of my friend, we painted all the walls and trim, organized closets and other spaces, replaced a shower in the downstairs and put in a garage door where a single frame door had been. This restored the home back to originial purpose and design as well.
For more information on appraisers and evaluating your home or what to change about your house for an appraiser or to sell contact our office today.