So, if you read the previous post, the question was what is an appraiser looking for to help him/her determine the value of a home? The appraiser looks at “the big picture”–how a home compares to others in the area that have recently sold. It doesn’t matter what the guy down the street has listed his home for, or what you paid for the home 5 years ago–what matters is what other people have been willing to pay for a similar house in the last few months! Appraisers consider recently sold properties and also the condition of your home relative to others around it.
Very often, a REALTOR® like me finds that a homeowner who wants to sell his home and an appraiser have a different idea of what’s valuable about a home. There are many things that are “valuable” to a seller that don’t matter much to an appraiser! These kinds of features may make a home more “sellable” but they don’t necessarily make it more “valuable”. There’s a difference! Here are a few areas where “saleability” may not add to “value” for an appraiser:
1. A new roof. No question that a new roof improves the “saleability” of a home. It’s important to the function and it’s expensive to replace, so a home with a new roof adds appeal to a buyer, but to an appraiser, not so much. Every home has to have one so the fact that yours is newer than the house next door doesn’t really matter. However, if your roof is older than what’s in the area and obviously in need of repair/replacement, that can definitely decrease the value for the appraiser.
2. The outside, i.e. curb appeal. How does your home compare to the neighbors’? If their homes and yards are nicely landscaped, well-maintained, and show no obvious signs of neglect (chipped paint,dead or overgrown plants and bushes, unkempt yard, etc.) and yours doesn’t, that can have a negative effect on the value for an appraiser. Curb appeal is very important–it sets the expectation for the condition of the house as a whole. If the yard looks neglected, that could indicate a lack of maintenance inside the home as well.
3. Remodeling projects, especially those that follow a current trend. Those types of projects can actually decrease value. What looks modern and stylish today will look dated and old in 5-10 years. Think about your wardrobe–are you wearing what was “in” 5 years ago? Probably not! However, classic pieces never go out of style and can be updated with minor adjustments and accessories. The same goes for your home. Built-in entertainment centers were all the rage a few years ago–now, not so much. Or what about cabinets? What’s in, what’s out? Dark wood, light wood, heavy carving, sleek and modern? For permanent and expensive projects, stick with classic designs and save the trendy stuff for things that can be easily changed, like paint and accessories.
4. Swimming pool–this is a tricky one! If most of the homes that the appraiser is comparing to yours have pools and pools are common in the area, then the fact that your home has one will not make it more valuable. If pools are not common and you have one, that also will not necessarily make your home more valuable. Pools are not for everyone! They increase your homeowners insurance premium because they’re considered an attractive nuisance. They mean extra time and expense for ongoing maintenance. They can definitely pose a safety risk for a family with children. So a pool can (maybe) increase “saleability” for a seller, but not necessarily “value” for an appraiser.
There are many other considerations for an appraiser to weigh when determining the value of a particular home, but I hope this gives you some insight into the difference between what makes a home more “sellable” and what adds or takes away from its value. If you have questions, by all means contact your REALTOR®, or me!