What will the appraiser look at?

Monday, October 28, 2013

What will the appraiser look at?

You may have heard, when putting your house up for sale you house is not sold to just one person but two, three maybe more! The buyer is the obvious one but most buyers have agents and lenders that need to be "sold" too.

Planning or preparing to place your house up for sale requires you make sure everything is in the best condition possible, as your house will need to be appraised. The appraisal is a mandatory step required by financial institutions to help determine the actual value of the property in the current market. Both sellers and buyers need to have an interest in ensuring that the best possible sales price is agreed upon and backed by the final home appraisal report.

So what will the appraiser look at? Though it is always subject to opinion, here are some basics.

Location, Facts and Features

The geographical location of a house impacts the appraisal amount, as homes located in good communities, close to good transportation routes and near basic services such as hospitals, schools, churches and shopping centers fare better in appraisals. The specific location within a neighborhood is also important. For example, a cul-de-sac home will pull a slightly higher appraisal amount compared to one on a thru street or busy in the neighborhood. Having neighbors with well maintained homes and yards will also prove positive in the appraisal of a property.

Age plus the lot size and square footage are the basis of how "comps" (comparable properties) are chosen in the area. Adjustments are made for some key features of the home such as fireplaces and decks.

How can I be "better" than my comps?

"Functional obsolescence" or "End of life" are terms you do NOT want to see in and appraisal report. Ask yourself about the following areas of your home with these phrases in mind?

Exterior Condition and Appearance

The outside of a house is one of the first things the home appraiser takes note of when determining the value of the property. Repairing siding/stucco issues and the roof are huge. Making sure the grass is cut, shrubs are trimmed, weeds are pulled and the yard is landscaped also helps to increase the value. Making sure all trash and debris have been removed from the front of the house also makes the home look better. Remove cobwebs, clean windows, clear gutters and wash the house if it has vinyl siding. This shows good maintenance of the home.

Heating, Plumbing and Wiring

The main systems within a home include the heating, cooling, water and electrical systems. The appraiser will review and assess these items as they are some of the most costly items to repair and remaining "life" of these items is considered. Make sure the appraiser can easily access the main areas of the home so he can arrive at accurate figures. Before a home appraisal, you may wish to have certified technicians inspect major systems to alert you to any problems that might be developing and if you receive a good inspection report of these items, leave it out for the appraiser!

Kitchens and Bathrooms

Repairing or replacing broken, damaged or obsolete fixtures, cabinets and appliances are very important BUT (there is always a but) be careful not to over-improve. If your neighborhood is "middle range" putting in a gourmet kitchen will not get you the return on your investment you were hoping for so stay consistent with the level of finishes commonly found in your area.

Cleanliness and Overall Appearance

The house itself needs to be clean and organized. Though an appraiser is not overtly concerned about "stuff" like piles of paperwork or dishes in he sink, he does need to be able to take pictures of all rooms and see all areas of the house. Clutter and/or empty can both pose problems. Damaged walls and heavily worn carpet could hurt you more than the cost to patch, paint, clean and arrange. A house that's well-maintained and in move-in condition is more likely to get a higher appraisal.