The strategy for how to increase home value for an appraisal is crucial for homeowners, real estate investors, and contract developers alike. A higher appraised value for your home can result in more favorable financing options for home equity loans or increased profit margins when selling your property.
So what can you do to ensure your appraisal returns with a high value for your home? From understanding your home’s current value to identifying areas where improvements may be necessary, we’ll explore how certain factors can significantly impact an appraiser’s evaluation and the assessed value of your property.
What Does a Home Appraiser Do?
An appraisal is a required part of the lending process. An appraiser objectively determines the fair market value for your property because the lender wants to make sure that the property is worth as much as what the buyer borrows.
If the lender gives more money to the borrower than the home is worth, the borrower will be considered “upside down” on their loan. This concerns lenders because they will take a financial loss if the borrower defaults on the loan. Having your appraisal report come in low can cause the deal to be canceled, so it’s essential to try to set yourself up right.
What Happens During a Home Appraisal?
Professional appraisers will take a look at your property itself, not the personal items in it, to determine how much it’s worth. Appraisers consider various aspects when determining a home’s value: location, lot size, structural integrity, overall condition of the property, recent comparable sales nearby, quality of construction materials used, and any significant home upgrades or renovations completed.
- The home’s exterior, including the siding, paint, roof, and significant outdoor amenities like swimming pools, landscaping, solar panels, and sprinkler systems
- The layout and each room
- The house’s foundation
- The condition, quality, and material of your appliances, fixtures, plumbing, and flooring
- Cabinetry and countertops
- Lighting fixtures
- HVAC system and furnace
- Interior paint job
- Basement (and if it’s finished)
- Electrical systems
Note that the appraisal is usually the buyer’s financial responsibility; it typically costs a few hundred dollars, but a larger property might cost you a little more.
Once completed, the report typically goes straight to the lender. If you want to see a copy, make sure you ask for it. This might be important if the value comes in low and you want to dispute it.
Know Your Home’s Value
To get a feel for what your property might be worth, hop onto Realtor.com to see what similar homes in your neighborhood recently sold for or are currently listed for. Keep in mind that when a neighbor of yours with a similar house has to sell quickly, and they sell below the asking price, that can affect the value of your home.
Knowing what your home might be worth is an excellent first step in getting a higher appraisal value – if you know what you’re working with, you can create a plan to make some improvements!
What Causes a Low Home Appraisal?
Appraisals can come in low for various reasons. Typically, it’s the changing market that affects them the most. If you’re in a “slow” market, you may not get as much for your home as you’d hoped.
Sometimes appraisers may not pull the best comparable sales (or ‘”comps”) when comparing your home to the others in the neighborhood. This is when it pays off to do a little legwork of your own and find similar properties that have sold for a higher value to dispute the appraisal.
Appraisers tend to be conservative instead of inflating values. However, there are many things you can do to improve your home and demonstrate its finer points.
What Determines A High Home Appraisal?
Homes typically appraise higher due to location, square footage, age and condition, recent comparable sales in the area, and upgrades or improvements made. A well-maintained home with modern amenities and a desirable neighborhood can significantly impact its appraisal value.
Make Necessary Repairs
Boost your home’s appraisal value by fixing any structural issues or damage that could lower it, such as broken windows, loose railings, roof leaks, or foundation problems. Keeping your home in good condition can significantly increase its worth.
Not only will this enhance your property’s appearance, but it will also ensure a higher property number for valuation.
Consider hiring professionals for major repairs and tackle minor fixes yourself to save money on costs.
Boost Your Home’s Curb Appeal
You know what they say: you never get a second chance to make a first impression. A home with a brown lawn and dead trees, or conversely, a yard overgrown with weeds, can be a big turn-off for prospective buyers and appraisers.
Revamp the outside of your house with a fresh coat of paint, outdoor illumination, and lush, manicured greenery for an inviting look.
- Plant colorful flowers and trim overgrown bushes to create a welcoming entrance.
- Install a new mailbox to add a touch of personality.
- Check out these pro tips for more inspiration.
- Declutter your front porch and remove any extraneous equipment or toys in the front and back yards.
- Touch up paint and replace peeling paint; otherwise, this may signal to people that you don’t take care of your home.
- Power wash the exterior and windows if necessary.
- Make sure your home is well-lit on the outside. Would families come to your front door on Halloween to trick-or-treat, for example? If it looks dark and unapproachable, probably not!
Remember, appraisers are still human. A great first impression sets you off in the right tone and can significantly impact the perception of the licensed appraiser and your property’s value.
Increase Home Value with These Home Upgrades
The impact of upgrades on your home appraisal value varies depending on their type and extent. If it’s in your budget, focus on larger projects that offer a strong return on investment (ROI). High-value improvements like a kitchen remodel or adding living spaces can increase your home’s worth significantly. Energy-efficient improvements, such as solar panels or smart thermostats, can also attract potential buyers and appraisers.
Other strategic upgrades, like modern appliances, hardwood, or tile flooring, can significantly increase your home’s value for appraisal. More minor cosmetic changes may have less effect but still have an impact; updated bathroom light fixtures, for example, can be worthwhile and give the powder room some polish.
Some of the top home improvements that will get you more value for your home are:
- Bathroom, basement, and kitchen remodels
- Exterior improvements, like new siding, paint, and an updated front entry
- Converting an attic into a finished bedroom
- A deck or patio
- Energy efficient windows
- Family room, 4-season sunroom, and bonus room additions
Also, document all the improvements you’ve made, and collect all warranty information for appliances, especially for new ones. These are nice things to point out during the appraisal process. Don’t hesitate to tell a home appraiser how many improvements you made to your house.
Create the Right Home Atmosphere
A cramped, obscure, and messy home makes it really hard for an appraiser to see the “bones” of the home and assess it.
A tidy home full of natural light with the feeling of space puts people at ease and gives the real estate appraiser a chance to see your actual home. Make it easy for them!
Here’s a checklist to create a positive ambiance in your home:
- Declutter and organize each room, even the closets. (Yes, people open closets – and drawers and cabinets.)
- Stage your furniture in an appealing way. This might mean moving furniture into storage.
- Apply some fresh paint. Use neutral paint colors on walls to make spaces feel larger.
- Incorporate natural light sources as much as possible. You can also get light bulbs that are all the same wattage for a uniform look and install dimmers so that you can control the lighting in any room.
- Consider adding inexpensive upgrades, like new cabinet hardware and updated lighting fixtures.
- Update some of your home decor. This could mean a statement piece, swapping out seasonal decor, or putting a strategic pop of color in a room full of neutrals.
- Bring some greenery or plant life into your home. You might get a small potted plant for the coffee table, a bowl of fruit, or a vase of in-season flowers for the kitchen.
You don’t have to do everything on the checklist if it doesn’t fit your budget. The most important thing to remember is light, bright, and airy. Start with decluttering to create some space so the appraiser feels like walking into your home is a breath of fresh air, and everything else will be icing on the cake.
Give Your Home a Deep Clean to Make a Good Impression
A sparkling clean home can make a huge difference in its perceived value, so focus on high-traffic areas like the kitchen, bathrooms, and living spaces, and consider hiring a professional deep cleaning service for the best results.
If you need to DIY:
- Remove any clutter.
- Scrub surfaces until they shine.
- Clean carpets and floors to perfection. Rent a steamer if need be.
- Make sure your windows are crystal clear.
- Wash those dirty dishes and put the laundry out of sight.
Trust us, your home will thank you for it.
Ready to Sell Your Home? Contact Us Today
Start your home-selling process by making necessary repairs, improving curb appeal through landscaping and exterior updates, updating appliances, and creating a welcoming atmosphere with neutral colors and decor. This will help you showcase your property at its best and maximize returns on investment.
The experts at The Associates Home Loan of Florida, Inc. have lots of experience navigating the appraisal and home sale process. We have many programs for people with nontraditional income, foreign nationals, and all types of properties. We’ve helped countless borrowers and homeowners just like you successfully get into the new home of their dreams, and we’d like to help you do the same. Contact us today to get started!