Want to Sell your House? Think Like an Appraiser
When it comes to home sales, buyers and sellers are not the only ones holding the monetary cards. Appraisers are hired by lenders to determine the fair market value of a home; and their reports can sometimes make or break a sale. So how do appraisers come up with their figures? Here’s a Q&A with Red Mill area resident and certified appraiser, Shocky Boyajian, who gave us some clues.
What are some of the top ways that home value is generally judged?
Besides location, square footage is definitely the most important factor. Also age, number of bed and baths, lot size (when over an acre or 2). Any other unusual amenity, like waterfront lots, can be important factors, too.
Does it help to clean and tidy up a house before an appraisal?
It certainly doesn’t hurt…It probably won’t have any impact on value; but the pictures will look better, and that will make the underwriter happy.
Does nice landscaping affect value?
In a word, “no” but it does make for a better looking appraisal report.
Can new flooring, carpet or paint affect value?
It can, but only if it allows the appraiser to choose similarly updated sales comparables that sold for a higher price than those that haven’t been updated. Any value attributed to improvements must be proven in the market.
How much do you lower an appraised value if a home is located on a busy road?
I usually adjust the price $2,500 to $5,000 unless the market is telling me something different.
Do swimming pools affect home value?
The accurate answer to this question is “it depends” on the market. An appraisal is a reflection of what the general public (the market) is willing to pay for your home at the time of the appraisal. If “House A” (with a pool) and “House B” (without a pool) are similar in every other aspect and House A sold for $10,000 more, then the pool is worth $10,000. The same exact situation in a different neighborhood could yield a 25 or 30K difference.
Some people convert porches into “sunrooms” and garages into “bedrooms.” Explain the requirements for each to be considered extra square footage and/or a bedroom.
Bedrooms must have a closet. Any added square footage must, from the inside, be finished off (drywall, etc) and must have a heat source similar to the rest of the home. Finishing off a garage and plugging in a space heater won’t do it. In that case, not only have you not added square footage, you’ve also taken away your garage amenity
Do you think it’s important for homeowners to be mindful of appraised value in their neighborhood before putting their house up for sale?
It’s important for a homeowner to always stay abreast of the market prices in their neighborhoods. A good Real Estate Agent should be able to help a seller come up with a fair sales price.
When should sellers hire an appraiser before putting their house on the market?
Sometimes homes that are not in a “subdivision,” or homes that are in areas where there are a lot of foreclosures and/or short sales, can be a little bit harder to arrive at a sales price. In these cases, potential sellers may want to solicit the help of an appraiser to come up with a fair market price.
When doing appraisals in areas where houses are very different, how do you compare them?
Finding similar homes is always the best way to go. An appraisal has at least 3 comparable sales used. It should be possible to find at least one sale that is close in proximity to the subject. Then, if necessary, expand your search to find more similar houses that may be a little further away.
How far back do you do in comparing sales?
The “rules” of appraising allow us to go back a year but for the most part underwriters don’t want to see anything over 6 months old. They prefer 3 months.
Can hiring a real estate agent help potential sellers with setting their home at the correct price?
Definitely!! For a seller who doesn’t have the knowledge of market conditions or the time to research it, a realtor is the key to bringing the maximum price for your home.