If you're selling your home, an appraiser an appraiser will likely be engaged to estimate the fair market value of your house. This process can be daunting for homeowners because they don't know much about the appraisal process and worry the valuation expert will say their home is worth significantly less than anticipated.
The appraisal process doesn't need to be scary, but home sellers and buyers should both familiarize themselves with what an appraiser looks for when evaluating a home. Understanding how an appraiser views a home can teach buyers what to look for in a potential home purchase, and should help sellers better prepare for an appraiser's critical eye.
What appraisers evaluate
Appraisers are going to examine several elements of a home as they complete their evaluation. The property's size is a critical component, and valuation professionals will look at the space offered by the site itself, as well as the actual dimensions of the house. A larger lot is generally preferable, as it offers the possibility of expansion, according to RealEstate.com.
"Appraisal experts evaluate every element of a structure."
From there, the appraiser will investigate the interior and exterior of the structure. They're looking for more than the number of bathrooms and bedrooms, however, and every element of the home's condition factors into their final judgment of the home's worth. As part of this evaluation, appraisers will check the home's construction materials and review their condition.
While more durable materials may increase the building's potential value, these elements can actually be detrimental to the home's value if they're in poor shape. Certain types of high-quality materials may be more expensive to repair than less-sturdy options. These pending repairs can drag down a home's total valuation.
As they examine the inside of a home, appraisers will evaluate mechanicals, such as the plumbing and HVAC systems. Again, the condition and age of these systems will play a huge part in the valuation professional's final decision. The presence of energy-efficient appliances and other accessories can make the home more appealing to new owners, or save buyers money over the duration of their ownership, will also increase the structure's worth.
Improving your valuation
If you're selling a home, you want to maximize your home's appeal so you can command a higher sale price from buyers. While you don't want to invest too much in a home you're going to leave, a few changes can result in significant value gains.
If you want to increase a structure's value, it's important to focus any renovation efforts in areas where they'll deliver the biggest return. Reuters noted that improvements to a house's bathroom and kitchen were more desirable for potential buyers than improvements to a structure's basement or other spaces.
"Certain renovations may provide value."
While large-scale renovation projects can boost your home's appraised value, they aren't necessary to see an increase in a building's worth. By cleaning your home thoroughly, you can improve a valuation professional's opinion. Fixing peeling paint and other minor cosmetic blemishes casts your home in the best light, and removing clutter makes it easier for the professional to actually see your home's condition.
Prior to the appraiser's visit, you should collect information about the home's physical properties and prepare documents that outline what renovation projects you completed on the house in the past, the Wall Street Journal reported. This information will make the appraiser's job easier, as they will have access to information about construction techniques and materials used.