Affect Your Appraisal Value
Thanks to a rebounding economy and real estate market, more people are remodeling and making improvements to their homes.
According to their 2017 True Cost Survey, HomeAdvisor found that Americans did more home improvement projects and spent about $1,850 more in 2016 than in 2015. In fact, the average homeowner spent $5,157 on home projects in 2016.
All this is good, since you recoup any money you put into your house, right?
Well, yes and no.
Many homeowners believe their weekend home improvement projects automatically increase the value of their home—and some projects will improve appraisal value. But expectations hit a wall when the appraised value of their home is much lower than they anticipated.
Which Factors Do Appraisers Actually Consider?
An appraiser’s job is to determine the value that your home is worth in the current marketplace. He or she will look at the permanent features of your home, which include:
- Age of the home
- Square footage
- Location and neighborhood
- Style (e.g. ranch, colonial, Victorian, condo, duplex, etc)
- Interior and exterior conditions
- Number of bedrooms and baths
- Condition of basic home systems
- Overall condition
The appraiser also researches comparable homes (comps) nearby with similar amenities as yours that have recently sold. These sales prices show what people paid for homes in the area—a realistic number in the current market context. Appraisers rely heavily on at least three comps and their features.
So how do you set apart your house and give it a competitive advantage in the market?
Focus Your Efforts for a Better Appraisal
When you invest in home maintenance projects, know that you will not get dollar-for-dollar returns for most projects. But they can help.
Anything you do around your house—from installing energy-efficient windows and doors, to replacing a cracked driveway—will make it more appealing and yield a better appraisal value.
And while an appraiser may not reward you for your brand-new custom-designed, multi-zone furnace, water heater, and wired-in generator system since they are categorized as “maintenance”, a home buyer will reward you.
Remember that if you have received a letter from Meridian Home Mortgage pre-selecting you for a home loan, we cover the cost of your appraisal when you refinance with us.*
*Meridian Home Mortgage Corporation will pay for an initial home appraisal (up to $600) prepared in connection with processing your loan application in accordance with our procedures. This appraisal offer is limited to the home appraisal required by Meridian Home Mortgage Corporation and is not valid for any other appraisal or loan.