Appraisals Can Make or Break the Sale or Refinance of Your Home!
Whether you’re buying, selling, or refinancing, chances are that in today’s changing market you are concerned about your appraisal. “In today’s market the appraisal process is challenging and appraisers are responsible for much more,” says Gig Harbor Real Estate Agent Joyce Shipley. “Low appraisals can stop a sale, and appraisers sometimes require repairs be made before the loan can be allowed to go through.” Appraisers say the following five areas are where homeowners often misjudge the worth of their abode.
1. The outside
The appraiser sees: Overgrown bushes and chipped paint.
What he does: Slices as much as 3% off the value of an average-size home.
Why: Curb appeal is primo, an unkempt yard is a sign that there may be other issues.
Moreover, the more meticulous your neighbors are about grooming, the more your shabby house will stand out- and an appraiser could downgrade the value of your home.
2. Basic systems
The appraiser sees: A brand-new roof.
What he does: Nothing.
Why: Just as a knee replacement won’t make you look 20 years younger, a new roof, furnace, or boiler isn’t considered an improvement to your home. That said, if your roof is in disrepair, replace it. Signs of leaks or discoloration can knock a significant amount off the home’s value.
3. The basement
The appraiser sees: A recently finished basement with a half bath.
What he does: Adds about 2% to the value of the home.
Why: Yes, your finished basement adds value — but don’t expect it to count like first-floor space. The addition of a bedroom and quarter bath on the ground floor could increase your home’s value by up to 20%, especially if you’ve got only one other bathroom.
4. The market
The appraiser hears: Two nearby homes just went under contract above their asking prices.
What he does: Nothing.
Why: While a broker might pump up a home’s asking price based on the sense that the market is “hot,” by and large appraisers are bound by the data of recent comparable sales.
5. A remodel
The appraiser sees: An expensive, custom-made, built-in entertainment center.
What he does: Makes a negative adjustment to the valuation.
Why: Cost doesn’t equal value. Renovations that are at all trendy or not in keeping with the historical period of the home will be assessed at the cost of ripping them out.
“As a homeowner you should be aware that the appraisers will call out things that need to be fixed as part of the appraisal process,” says Joyce. “It is important that you make the repairs before the appraiser gets there.” If you’re thinking of buying or selling and have questions about the appraisal process, contact Joyce!