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FACTORS CONSIDERED IN AN APPRAISAL

I am not an appraiser, but in the thirty plus years working with them in my real estate business I have learned that there are some factors considered by appraisers in valuing properties that are important for clients to understand in selling or buying.  Understanding how an appraiser views a property should help in determining what to do to enhance the value of your home or if you are buying a home what amenities to look for that are of value.

When considering comparable properties that have sold an appraiser will be given a time frame.  The lender or relocation company may give a period of 90 to 180 days in which a home has sold.  If a home sold 9 or 10 months ago, the price may be irrelevant.  In a declining market the time frame may be shortened to 60 days.  So if your neighbor’s house sold a year ago for a higher price it will not be considered if the appraiser may only choose from homes that sold within the past 60 days.

Incentives and concessions are also factored into the value.  If the seller pays $5000 towards the buyer’s closing costs, that will be taken into account when determining the final price.

Condition and curb appeal will also be considered and this is where you can have an impact if you are selling.  The condition of the interior and exterior will be evaluated.  A beautiful yard, well- maintained interior, updated colors, carpet, countertops, and appliances will affect value.  If you have kept the roof and siding in good repair that is also considered in the appraiser’s evaluation as well.

The home’s total square footage and functional floor plan will also be considered.  If you have plans to add a room or two onto your home, be sure it fits into the current floor plan.  You don’t want your addition to be too obvious an addition or out of place with your current floor plan.  You also don’t want to over build for the neighborhood.  If the size of your home far exceeds anything else in the neighborhood, that could bring your value down.

When using comparables the appraiser will generally look for similar floor plans.  A single level compared to a single level or a two story compared with a two story are typical.  A general rule of thumb is that the main floor square footage is usually the most expensive.

Homes that are within newer neighborhoods tend to appreciate in value faster than older neighborhoods.  Again, your improvements need to fit within the value of  the neighborhood.  Location is important.  If the neighborhood is located close to schools, shopping, etc., it will have a positive influence on value.  Also, if the neighborhood has an association and amenities such as a park or swimming pool that will also have an impact on value.

Improvements such as a well maintained garden and yard, automatic sprinklers, fence, covered patio, hot tub, pool, and play area will be considered.  A large garage and a shop will also impact the value.

You would be wise to consult with your real estate agent before attempting any improvements.  Ask them what would bring the most value to a future appraisal.  Looking at your home from the perspective of an appraiser will give you some good insight as to what is of most worth.

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