If you’re ready to put your home on the market, looking to refinance your mortgage for a lower interest rate, or you’ve found your dream home and are prepared to purchase it, a home appraisal will be in your near future. Knowing the value of your home or your future home is vital. Buying, selling, or refinancing a home all require a home appraisal to be completed.
What Is a Home Appraisal?
A home appraisal is simply finding the true value of a home. To get the true value, an unbiased certified appraiser needs to assess the house’s condition, features, and location to determine the value. For the appraiser to determine the worth of a home, they must first complete a visual inspection. During this visual inspection, they look at the house’s interior and exterior, noting any repairs that need to be made. The appraiser will also look at current market trends when determining the value of your house.
While completing the visual inspection, the appraiser will look at the home’s overall functionality, including the floor plan. The main factors that buyers look for include the number of bedrooms and bathrooms as well as the overall square footage of a home. These same factors play a role in the overall worth of the home. The location also affects the value of a home. Living in a quality neighborhood can significantly benefit the value of your home.
Finally, the appraiser will look at other comparable homes that have sold in your area to determine the home’s value. After all of this is completed, the appraiser will provide a report analyzing and concluding the results.
What Do Appraisers Look For in a Home Appraisal?
An appraiser’s job is very detail-oriented, and many factors are taken into consideration when assessing your home to determine its value.
General Condition and Age
While you can’t change the age of your home, you can complete the necessary upkeep on it. An appraiser will keep an eye out for leaky faucets, missing door handles, running toilets, or ripped carpet. The appraiser will look at the quality of material used throughout the home. If general maintenance and upkeep have not been completed on the house, your overall appraisal can be affected. Even with the best upkeep, a newly constructed home will consistently appraise higher.
The Home’s Exterior
Curb appeal is important. Most people do judge a book by its cover, and the same general rule applies when looking for a home. Taking time to trim up trees, lay down some mulch, add some flowers, or put out some decor can make your house pop and be more inviting. The appraiser will also check out the roof and look at the overall structure. Having additional buildings on the property can also spruce up the appraisal. After all, everyone loves having a garage. The appraiser will also consider the deck, porch, siding, lot size, windows, driveway, gutters, and neighborhood.
The Home’s Interior
After scoping out the exterior, the appraiser will move on to the interior. It is imperative to clean your home because a dirty house appears to be mistreated, which can decrease the value of your home. Appraisers typically spend the majority of their time inside. They will look at the foundation, walls, ceiling, and floors. They will also inspect the home for visible leaks or damage. The appraiser will note the size and number of bedrooms and bathrooms. Even though an appraiser does not consider the decorative details, you still want to make sure the interior is appealing.
Improvements, Additions, and Upgrades
As the appraiser is walking through your home, if they notice minor issues that need to be addressed, they will document them at $500 per issue. These minor issues can add up rather quickly, decreasing the value of your home appraisal. To get the most out of your house, complete minor fixes and repairs as needed and consider performing any improvements or upgrades that you can afford.
Kitchens and bathroom updates are highly recommended and can have a drastic impact on your overall appraisal. Applying a new coat of paint or replacing a worn carpet can also make a huge difference in your appraisal. Other beneficial improvements include fixing the cooling systems, redoing flooring, or replacing doors. Installing new lights can also leave your home looking bright and fresh, which in turn can add a few dollars to the value of your home.
Damage and Infestations
An appraiser is going to look for signs of damage to the home that will affect its value. They will look for signs of water damage such as leaks, mildew, rotting, and mold. Mold is toxic and can cost thousands of dollars to remove properly, so any signs of it will be noted. The appraiser will also look for any signs of infestations from pests such as termites or rodents. These pests can damage the home’s structure, which will play into the appraisal value.
How Do I Prepare for an Appraisal?
Preparing for an appraisal can be time-consuming. You will want to make sure that your home is clean and presentable and organize the closets and cupboards. An appraiser may look past the clutter, but it’s best practice to have your house tidied up so that they don’t have to. Switching out decor and modernizing your home can also be a key factor. Although the appraiser will not be assessing the value of your furniture or wall art, these factors can help make your home more inviting and attractive.
An appraisal of a home is one of the key factors in solidifying a deal. A lender wants to make sure the money they lend to a prospective homeowner is valid as they don’t want to lend more than the house is worth. An appraisal can make or break the deal when it comes to buying, selling, or refinancing your home. If you’d like to learn more about home appraisals and the lending process, reach out to the knowledgeable team at Titan Funding.
Image via Flickr by tony.mariotti