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A Guide For Both Buyers and Sellers: What Will The Appraiser Be Looking For, and How Do They Determine the Value of The House?

A Guide For Both Buyers and Sellers: What Will The Appraiser Be Looking For, and How Do They Determine the Value of The House?

If you are selling your house, you should expect to see an appraiser further into the selling process. Actually, if you’re smart, you’ll have your house appraised before you even list it. If you wait until the middle of the process, expect some surprises. In any event, the point of an appraisal is to find out the true value of a piece of property.

Both the buyer and the lender are going to want to see what your home’s true value is. You cannot change an appraisers mind in terms of what he values your house at. But you can be armed with information as to what goes into your appraisers decision. Here is what appraisers look for.

The first factor that appraisers are looking at is the exterior condition of the home. A house is made up of three main components: the roof, walls, and a foundation. These components are what determine whether or not a house is “safe” to inhabit. Appraisers will be searching for any defects in the home’s construction, but they pay particular importance to those three components. 

Keep in mind, that the appraiser is also going to be reporting his findings back to the lender who will be providing the buyer with his or her mortgage loan. The bank takes the appraisal report very seriously, as they want to make sure the house they are loaning money for actually has equity in it.

The next part that an appraiser is looking at is the total size of the property. People value bigger homes and bigger lots, so lot size and square footage play a major part when it comes to the appraisal figure. The more beds and baths that the home has, the more the house is likely to be worth.

Buyers love having the option of expanding a house, and will spend more money on a property, if it has the room available to do just that. 

The appraiser, of course, takes the interior of the home into consideration as well. They will be looking at the plumbing, the electrical conditions, the conditions of the kitchen(s) and bath(s). They will be judging the floors, doors, as well as the walls. The appraiser factors in absolutely everything, even the types of appliances and lighting that you have.

Any improvements that you have made to the home will be considered. However, the appraiser is also looking at the quality of the improvements that you made. Did you add a new floor? Did you remodel a kitchen or bath? Did you add a new HVAC system? It’s no secret that buyers love new appliances and gorgeous renovations; this is because they add value to the property. Banks love to see that too, as they know that they are making a good investment.

Lastly, an appraiser will be looking at “extras and additions.” These are any features that make a home “special.” This may include a movie theater room, a garage, a fireplace, an alarm system, or an elevator. Any additions such as these are sure to add value to the house.

 

2 Comments

  1. I got a lowball appraisal on my home when I tried to sell it last year. Honestly, I don’t know that I’d bother trying to challenge it. Unless there really is something important that he left out, such as he didn’t notice the fireplace or new appliances in the kitchen, I would let it go. if he missed a square foot in the bathroom, he’s not going to bother, because it would make no difference. Appraisals that come in lower than your list price are more than disappointing. But you’ve got to face the music, and adjust your price accordingly.

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