Home appraisers determine the home value by considering many factors. Understanding these elements will also allow you to make a smart decision. If you are a seller, this knowledge will help you prepare the property for appraisal and increase your chances of getting a positive result.
Your home appraiser will compare the home with similar ones in the neighborhood. He will note the size and condition of the home. He will note the interior and exterior size, upgrades, maintenance, and the age of major components such as the roof. He will consider the property’s location and its desirability.
The home’s general condition: The appraiser will assess the materials used in the home, the home’s condition, and physical aspects that may be damaged and affect its suitability for living in. Are there structural defects, missing door handles, leaks, or other maintenance problems?
The appraiser will not really focus on the home’s cleanliness but he will look for signs of neglect like defective windows, cracked walls, damaged floors, peeling paint, etc.
The age of the home: Appraisers consider the age of the home when determining its value. Newer homes generally get a higher value than older homes.
The home’s location: The appraiser notes the home’s location and this plays a very crucial part in determining its value. A home’s proximity to good schools, hospitals, police and fire stations, and other important establishments can increase the value of a property. Is it a neighborhood of owner-occupied homes, tenant-occupied homes, or suburban or rural?
Your neighborhood’s crime rate and proximity to busy roads or foreclosed properties also affect home value.
The home’s interior: The appraiser will spend more of his time checking the interior of the home. He will note the number of bedrooms, bathrooms, and if there is a crawl space, attic, or basement. He will note the finishing materials for the walls, floors, and the windows. Of course, it also matters whether the basement is finished or unfinished. Signs of neglect such as leaking faucets, broken windows, and visible electrical issues will have a negative impact on the appraisal report.
The home’s exterior: The appraiser will determine the structural soundness of the home. He will look for signs of water damage and problems such as a lopsided porch, leaning chimney, cracks in the foundation, etc.
The quality of the roof also greatly impacts the home’s resale value. He will also inspect the condition of the siding, deck, and other exterior parts of the home.
The square footage of the home:
Appraisers also consider similar homes in your area. They will note the square footage, number of bedrooms and bathrooms, and use this information to determine the value. They will note the size of the lot. The size of your garage and the absence of one also affects home value. A house with a 2-4 car garage will have a higher value than a 1-car garage or none at all.
The home’s design: A home that looks outdated is harder to sell because it appeals to fewer buyers. An appraiser will take this into account.
Comparables: Appraisers use data about properties similar to yours in the neighborhood that were sold recently. Their selling price will affect the resale value of your home.
Infestation issues: The appraiser will look for signs of termites and rodents which could cause damage to the structure.
Improvements: The appraiser will also consider if the home has been recently renovated. Energy-efficient systems or appliances are big advantages. Some home improvements increase the value of a property while others don’t. For instance, a centralized air-conditioning system puts a higher value on the home than individual units in every room.
Appraisers also note if your home uses oil, gas, or electricity for heating. Additional upgrades such as hardwood flooring, new siding, or new windows also affect the appraisal.
Water damage: One of the most critical elements that appraisers look into is water damage. This can result in mildew, mold, rotting, and other problems. He will check the basement for water damage, roof leaks, plumbing issues, and ceilings, floors, and walls for stains.
Safety features: The presence of safety features like handrails on staircases and smoke detectors, among others, are also noted by an appraiser.
A homeowner planning to sell the house can request a home appraisal. The report will guide the owner in setting a fair selling price. For homebuyers, lenders typically request an appraisal when you apply for a mortgage and the fee is charged to you. Homeowners wanting to refinance can also request an appraisal to know how much they can borrow.