An appraisal is a tool that the bank uses to help determine what your home is worth. There are certain things that positively impact your home appraisal valuation and certain things that negatively impact it. Knowing what you can expect will help you either sell for the right price or buy for the right price, depending on which side of the market you are on right now.
It makes sense that the curb appeal of your home has an impact on its value since that is the very first impression anyone will get of your home. The curb appeal means many different things aside from simply a manicured lawn and pretty landscaping; it also means:
- The “prettiness” of the property
- Size of the lot
- The view the home has
- The usability of the land the home sits on
This does not mean that if you have a small lot and barely any landscaping that your home will appraise for less than you thought. It does mean, however, that simply making some minor changes, such as adding potted flowers or flower boxes around the house; updating your mailbox; and adding a few bushes just might enhance the value of your home.
Location is Critical for Home Appraisal Valuation
The curb appeal of your home plays a major role, as does the home’s location. This does not mean where the home is located on the block, but what the overall area is like. Is there a lot of crime? Is the area continually growing? What are the schools like? What about the hospitals? What types of amenities are within walking distance of the home? How far away are the nearest stores? These are the things the appraiser looks at when determining the value of your home. Obviously, higher crime areas will have a lower value as will homes that are out in the middle of nowhere and that take long periods of time to get to reasonable shopping centers.
Age of the Home
Even people that do not want to build their own home prefer younger homes just because of the fewer things that typically need to be changed on these homes. Besides that factor is the presence of obvious wear and tear over the years. Things like the roof, electrical systems, plumbing, and even the foundation will show their age. Of course, if you completely redid the entire home into a more modern home, these factors might not bring your value down, but rather bring it up. In some cases as well, a historical home has, even more, value because of its importance in society. There is a huge market for historical homes, so owning one could be a profitable endeavor for you.
Amount of Usable Space
You could own the largest house on the block, but if the layout does not leave you with a large amount of usable space, your value could suffer. The appraiser will look for the amount of square footage of the home on the living levels (everything above grade) and how the area is used. Typically, layouts with more open space have higher values, but every area is different in regards to what is popular. If you have rooms that do not serve a purpose or prohibit the standard purpose of a home or specific room, it could hinder your home’s value.
Type of Parking
Parking is a key component of any home and will play a role in its value. Is there a garage? If so, how many cars does it hold? Is the garage attached or detached? These are the things the appraiser will consider when determining how the garage figures into the value of the property. Typically attached garages provide more value than unattached simply because of the convenience they provide.
Unfortunately, your neighbors play a role in the value of your home. The good news is that it is only those neighbors that are unkempt or have an unusual type of home or exterior of their home that affects your value. For example, if your neighbor decided to paint his house bright pink, it might negatively impact the value of your home. On the other hand, if you have normal neighbors that keep to themselves and keep their home looking nice, their home should not affect the value of yours.
There are numerous factors that play into the value of your home, many of which you can have a say about. If you are in the market to sell your home, think about how an appraiser would look at certain aspects of your home and then see if there is an affordable way to rectify the situation. If you want to get as much money as possible for your home, you should make it as user-friendly and open as possible in order to avoid getting a lower value for something that you could have helped.
Justin McHood is America's Mortgage Commentator and has been providing expert mortgage analysis for over 10 years.