If you’re ready to get your home appraised, you’ve probably covered the basics, like vacuuming, dusting, and decluttering. When you’re expecting a home appraiser who is going to inspect your home from top-to-bottom, you want to make sure that everything is taken care of – even those projects you may have been putting off.
Considering the time and emotions you may have invested in the home, you might be anxious to get the results. And, since a buyer’s lender needs a home appraisal to validate the financing for the purchase, there’s a lot on the line when it comes to the appraisal.
It’s worth knowing what factors can hurt an appraisal so you don’t wind up on the lower end of the scale. Here’s a list of common factors that can hurt a home appraisal:
1. Deferred Maintenance
One of the biggest factors that can reduce a home’s value is deferred maintenance. Homeowners may not realize that neglecting regular upkeep can blossom into a costly and extensive issue.
For example, say your roof has a small leak that may cost $600 to fix. Postponing that for years will lead to rain dripping into your roof, ceiling, and drywall – turning a $600 problem into a $10,000 problem.
In this case, a home inspector can benefit you. They can give your house a check-up and point out any items you might not have noticed. That way, you can take care of them before you list your property.
2. Outdated or Undesired Cosmetics
According to the National Association of REALTORS®, Americans spend over $400 billion annually on remodeling their homes. Typically on things like worn-out materials, finishes, and surfaces. Outdated cosmetics can dip a home’s value.
Experts caution against choosing finishes that cater to selective tastes. If the finishes are too expensive or niche for your price point, you aren’t likely to recoup the costs at resale.
It’s important for sellers to note the difference between appraised value and what a buyer is willing to pay. An appraiser will note a value for high-end appliances or real marble countertops, but if those items have undesirable finishes, a buyer’s interest may drop.
3. Market Conditions
According to The Appraisal Institute, “[I]t is important to recognize that the value of a property is dependent on the future benefits that a property will bring to its owner.” An appraiser will examine whether sale or leasing prices are increasing and decreasing in your area, whether foreclosures and vacancies are on the rise, and more. This offers not just a property’s appropriate value but also shows any future benefits of ownership.
If your agent has fielded higher offers on comparable properties in your area recently, they may also put those offers on the table with a list of upgrades to the home to show the appraiser that buyers are seeing the value.
4. Needed Repairs
Be up-front with your appraiser about any necessary repairs that you haven’t completed. If they are bigger repairs, like cracks in the foundation or holes in the roof, get repair estimates from a professional. An appraiser can factor that cost into their figure instead of trying to use a more general figure.
5. Comparable Properties
When you list your home, a real estate agent will look at comparable properties in the area to help arrive at an asking price. An appraiser will look at this data, as well. While the asking price of other homes is out of your control, it helps to pull these records of comparable properties to help justify your evaluation.
If an appraiser compares your property to one that turns out to be an outlier – such as a home being sold to relatives for a lower cost – it can impact your appraisal. If there’s a better comparable for the appraiser to use, your agent can bring it up ahead of the appraisal.
Find a REALTOR®
Find a local agent who knows the market & can help you sidestep the common obstacles that slow down the process. Selling a home can be a journey, but it is much easier with the help of a REALTOR® you can trust.
Team Melton is ready to help you through the process. Our team of professionals has over 50 combined years of real estate experience to assist you through every step of the process. Contact us today to get started!