Having an appraisal come in low can be upsetting to both the buyer and seller. Considering the impact a low appraisal can have on the home buying and selling process, it's important to educate yourself on what factors typically lead to a low appraisal.
Your home may have an incredibly finished basement, but the appraiser will still have to calculate the value of the basement differently than the square footage above ground. This is, in fact, one of the more common reasons why an appraisal comes in low. Valuing a basement can often be far more subjective, especially when there are extravagant features such as a home theater, custom bar, or a personal gym. While a nice finished basement can substantially upgrade the square footage and features of a home, the value of the basement space will still only be worth a fraction of what similar space upstairs would be.
Every day there are thousands of properties that have price reductions, and it only means one thing: the home was not priced appropriately. The seller was overzealous, or perhaps the agent promised the moon in hopes to make a sale. In states where dual agency exists, a buyer will occasionally go directly to the listing agent. They don’t have a buyer’s agent in their corner guiding them, and they end up significantly overpaying for the property. When purchasing a home, it always makes sense to have a buyer’s agent representing your best interests. Don’t be conned by dual agency.
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The home appraisal can be a nerve-wracking process for many sellers. While most appraisals don't ruin a sale (fortunately!), there are still some persistent myths that far too many sellers believe. Remember: the more you know, the less likely it is that you'll be surprised!
Wrong — they are very different! As stated in our last blog post, a home inspection is intended to identify issues with the home that everyone should be aware of before money is exchanged, while an appraisal aims to determine the market value of the home. While an appraiser may flag problems that they notice during the appraisal, it is in everyone's best interest to hire an inspector in addition to the appraisal.
This is often the hardest pill for most homeowners to swallow. You may have the biggest, most beautiful home in your area, but that does not guarantee that the appraisal price will reflect how exceptional your home is. In fact, standing out too much can even do more harm than good.Homes are priced based on their area. More specifically, homes are priced based on their neighborhood. The appraiser will consider the size and amenities of other homes in your neighborhood to determine the price of your home. If everyone else has 2,000 square feet of space and laminate countertops, but you have 4,000 square feet and granite countertops, yours will likely be priced somewhat higher, but not nearly enough to get your money back if you have over-improved.As always, talk to an experienced appraiser before making any major changes to your home. When it comes time to sell, you'll be glad you did.
When it comes time to sell or refinance your home, getting a high home appraisal cost is crucial. Fortunately, there are steps you can take to ensure your home's value hits maximum dollar.
Although clutter is inevitable with a busy family, it can also lead the appraiser to question if the homeowner is capable of maintaining the entire home. Some quick decluttering tips:
While this seems like an obvious step, many homeowners are understandably busy with jobs and family concerns and overlook the fact that a clean home is a desirable home.
Investing $100 in grass seed to reseed, or at least patch bare spots, in your lawn can really pay off when it comes to appraising your home.
Few things in life are certain, but if you see a small crack in your home's sidewalk or driveway, it will only get worse if left unattended. Ready-to-use sealant for patching cracks in concrete is sold in tubes (about $5 for a 10-ounce tube) and applied with a simple caulking gun, while asphalt repair products are even less expensive.
Whether it's a roadside mailbox or one mounted by the door, the mailbox is one of the first things visitors to your home notice. Shop carefully and $100 could buy an attractive new mailbox and perhaps even a new post to mount it on. You could also just invest in some fresh paint for an easy and affordable spruce up. Plant a perennial, like ornamental grass or a climbing vine, near your rehabbed mailbox for added appeal.
Buying a quality power washer to pressure hose decks, patios and other outdoor surfaces is expensive. But for about $50, you can rent a power washer for a day from a home improvement store and scrub down everything that needs washing.
Clean your shutters with soapy water. If you need a ladder, position it where appropriate. Scrub all surfaces that need painting; dirt and dust will prevent your paint from adhering properly.
Place old newspapers under each shutter and around your doors.
Use the painters tape to cover the house around the shutter to protect against accidents.
Get your buckets ready and put your vinyl gloves on. Pour primer into the first bucket.
Paint at the top of the shutter and work your way down. Make sure to get in between the slats. Use light pressure to eliminate brush strokes.
Once your primer dries, repeat the steps for your paint in the second bucket.
Some colors require two coats to achieve a richer shade. Be sure to let each coat dry before you start on the next coat.
Solar landscape lights are a cheaper, greener, and easier alternative than having a complicated lighting system installed in your yard. Simply place the lights around your sidewalk, let them drink in the sunshine for power and enjoy your newly lit pathway at night.
Consider repainting the door in a contrasting color that really pops, polishing or replacing worn hardware and perhaps springing for a new set of house numbers.
As you decide what changes to make, keep an eye out for maintenance problems, such as torn window screens, dripping faucets, running toilets, missing trim and broken door handles. These should be fixed prior to the appraiser's arrival.
In most areas, property tax is based on how much your property is worth in your area. However, don't expect your appraiser to automatically lower your property taxes. Having your property taxes lowered takes more than a downturn in the local housing market. You'll need to file an appeal to reduce the assessed value of your home.