Top five things appraisers look for.
A residential appraisal is more than an inspection; it’s a professional opinion of a home’s value. Appraisals are particularly important when a buyer applies for financing with a mortgage lender, as it tells the buyer and the lender if the price is “fair market value”. This helps reduce the risk of overpaying.
Also, if a seller has priced a property above fair market value, it may jeopardize a potential sale — especially if the buyer chooses not to finance the difference out of their own pocket.
When a trained appraiser visits a property, the following features will be taken into consideration when determining its value in the current real estate market.
The overall safety of the future buyer is also considered. Do steep, narrow staircases or loose floorboards pose a risk? Are the electrical and plumbing systems in good repair and “up to code”? Is the home equipped with fire and carbon monoxide detectors?
Sellers are advised to remove or replace anything that’s outdated, damaged, unsafe or unusable. Replacing these with items such as newer appliances, a finished basement or even updated “smart” features may pay off.
If you have questions about property values or any part of the home financing process, contact KBHS Home Loans today. You can rely on us for fast, friendly advice and guidance.
Also, if a seller has priced a property above fair market value, it may jeopardize a potential sale — especially if the buyer chooses not to finance the difference out of their own pocket.
When a trained appraiser visits a property, the following features will be taken into consideration when determining its value in the current real estate market.
Curb appeal
This is the first thing potential buyers will see, so the appraiser will evaluate a home with the same perspective. Sellers should take the time to tidy landscaping, sidewalks, trees and any decorative items.What are the neighbors like?
In addition to a home’s general area, an appraiser will look at “comps”. These are the recent sale prices of nearby homes, preferably with similar features and size to the home being appraised. This comparison helps determine a home’s value. Other local features that can affect a home’s value include the quality of the local schools, zoning regulations and crime rate.Exterior features
After measuring the lot’s size, the appraiser will evaluate the home’s overall design, structural integrity and construction quality, especially the foundation and roof. Problems with these two items can lead to costly repairs, which a potential buyer will certainly want to avoid.Interior features
The home’s design and overall condition are addressed when looking at the floorplan and flow. An old, inefficient HVAC system or outdated major appliances can reduce the appraised value.The overall safety of the future buyer is also considered. Do steep, narrow staircases or loose floorboards pose a risk? Are the electrical and plumbing systems in good repair and “up to code”? Is the home equipped with fire and carbon monoxide detectors?
Updates and improvements
While an appraiser isn’t overly concerned about a homeowner’s sense of style, renovations and additions will be part of the appraisal. Bathroom improvements and kitchen upgrades are two areas that can increase a home’s value while adding to its overall attractiveness to a potential buyer.Sellers are advised to remove or replace anything that’s outdated, damaged, unsafe or unusable. Replacing these with items such as newer appliances, a finished basement or even updated “smart” features may pay off.
If you have questions about property values or any part of the home financing process, contact KBHS Home Loans today. You can rely on us for fast, friendly advice and guidance.