Ask Your Appraiser

Renovation vs. Value
October 4th, 2013 10:00 AM

There are many homeowners who order an appraisal and are frustrated or disagree with their property value.  A homeowner may think just because they renovated the place, their value should increase, or the renovated cost should reflect the appraisal value. However, there are many factors that go into an appraisal such as; neighborhood, style of home and overall renovations.

An appraiser looks for conformity; they look for what appeals to a broader audience. Renovation costs are not reflected in the appraisal report in the same way most think it should. An appraiser would assign a value to a particular renovation based on data pulled that showed homes that sold in the same market. So, depending on the data at times, some renovations can increase value.

For example:

Your kitchen for $12,000 may be appraised for the same amount with a comparable home that sold for $6,000 with the same renovated kitchen. The best way to calculate a renovation value is 'market extraction'.

The best way homeowners and brokers can help an appraiser with this particular situation is to collect data that show different attributes. There should be a copy of an old appraisal, if available, a copy of exterior and interior sketches with dimensions, floor plans of the home, any notable features of the home and proof of their value, and anything helpful to the appraiser.

Most importantly, hazards, contaminants and odors should be fixed before the house is listed. A good test to tell if a home is ready to list is whether or not you would let a child run around the home unattended.

If you're a homeowner who is looking to increase your property value, but don't know what renovations to make. Call us at (404) 955-9997, with an appraisal we add listings in the report for comparable purposes and note what needs to be done in order to bring up the value.

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Posted by Michael Anthony on October 4th, 2013 10:00 AMPost a Comment

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