A visit from an appraiser is an inevitable part of selling your home. Even if your buyer is happy to pay what you ask and loves the place, the lender will still require that an objective third party, in the form of a professional appraiser, come through the home to determine its value.
Because the appraiser operates independently, their opinion will be based purely on the market and the state of your property. But, while you may not be able to sway the final verdict, it is certainly worthwhile to know what an appraiser will look for.
Your Home’s Exterior
At its most basic, a home is made up of a foundation, walls and a roof. All three of these play significant roles in the functionality, and the reliability of a dwelling. The appraiser will pay serious attention to all of them. The primary purpose of the appraisal is to make sure the mortgage holder is not lending money on a property that does not have the necessary equity.
Size of the Property
The size of your lot and the size of your home are both important considerations for the appraiser. The more bedrooms and bathrooms you have, the more you can expect the house to be worth – especially if they are large and accommodating. The square footage of the home will make up a large portion of what goes into figuring out the appraised value of the home.
Condition Of The Interior
Things like windows and doors, flooring, walls, plumbing, electrical, kitchen, and bathrooms all play a big part in the value of a home. The appraiser must know about all of these and be able to tell good from bad, and you can rest assured that he or she will look closely at yours. This is true even down to the appliances your home includes and the light fixtures you have installed.
The value of a home does not stop at its original construction. The appraiser will be very interested in any improvements you have made and the quality of those improvements.
A new floor, a renovated bathroom or kitchen, new appliances, or an HVAC system – all of these are considered by the appraiser to determine overall value.
Buyers and lenders love newer appliances and quality renovations because they contribute to the lasting value of the property. A new dishwasher and kitchen renovation may add another 20 years to the life of a kitchen, something that is good for everyone involved.
Home improvements will undoubtedly be a factor in how an appraiser determines the value of a home!
How Do Appraisers Calculate My Homes Value?
Now that you understand what appraisers look at during a real estate appraisal you probably want to know how they calculate the actual market value from this information.
Most residential property is evaluated by following what is known as the comparable sales price approach. This is also how, when selling your house, I would use the market data to assist in pricing the house properly to sell. Therefore, using the comparable market analysis helps to price the home in order to attract knowledgeable buyers.
Essentially an appraiser will use market data of most similar homes that have sold within a certain distance of your home over the last six months. Appraisers will then make adjustments based on the features and characteristics of the other homes. For example, let’s say your home has three bedrooms and one bath. One of the comparable homes in the neighborhood is very similar in size to your home but has four bedrooms and two full baths. The appraiser could use this property as a “comp” but would need to adjust for the fact there was one more bedroom and bath.
If there is anything specific you would like to find out about adding value to your house, I am happy to discuss with you!
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