Far too many home buyers skip the most important step in purchasing a home because they are too eager to grab the house they want. This one simple step, a home appraisal, is vital in everything you do going forward.
If you are the seller, the dynamics of an appraisal are a little different, but no less important for you as well as the potential buyers.
In fact, the appraisal is on par with the home inspection, the two most vital steps in buying and/or selling a home. Skipping either one of these steps is akin to setting your money on fire and watching it burn. Since you would never do that, find a proper property appraiser to get the home and the surrounding land appraised before you move ahead with buying or selling plans.
What Is a Home Appraisal?
Imagine looking at a home and the property around it. It looks so lovely, doesn't it? Walking inside you may discover that the interior looks well-kept, or that the interior doesn't match the kept appearance of the exterior. Still, what is cosmetic versus what is necessary tells you what the home is worth.
A home appraiser steps onto the property to see if past county/city appraisals of the home and property are still valid. Is the home still in good to excellent shape? Are neighboring properties eyesores or are they lifting the value of the property that is for sale? The appraiser is looking at both the house's condition and the house's modernization to determine if the house is too outdated to be valued at the expected value, or if the house is up to date and sports several features that make it worth more than the expected value.
To a seller, the latter is desirable. To a buyer, middle ground is preferable, since the house and property are in better condition with little work needed and a lower price/value makes it easier to make an offer. Both the seller and the potential buyer can have separate appraisals to determine what the value of the home and property are.
How Are Home Appraisals Generated?
As previously mentioned, there are lots of factors in play. The location of the home and property is a big deal. You can bet that a waterfront property is valued higher than a home that is nowhere near water, even if that waterfront property is the most run-down house on the road.
Acreage of land and how valuable that land is in that area also dictates what the appraiser feels is right. The updates to the home are important too, since a modern kitchen, updated plumbing, modern electrical work, and certain appliances increase the value of the home. Square footage of the home is another factor; the bigger the home the bigger the value.
How to Get a Good Home Appraisal
It goes without saying that you want the best possible appraisal you can get. For sellers, this means that the home is appraised much higher than expected and therefore the seller can ask buyers for more money. For buyers, the appraisal should be high, but not too high as to put the purchase price of the home out of their budget.
To get a good home appraisal, you have to start with a good appraiser. Many property appraisers work in the real estate business, although some work as freelance consultants. Hire one with a good reputation for this line of work. Keep your appointment with him/her. Then make sure your home and property:
- Are clean, tidy, and everything is repaired and working.
- You have some modern updates to the home, such as a completely remodeled kitchen, bath, closets, storage, etc..
- You have other features that would make the home more valuable, such as solar panels, geothermal heating and cooling, Energy Star appliances, water softener, etc..
- Any outlying buildings, such as a garage, pool house, hobby or office space, etc., are all in excellent condition.
There isn't much you can do about the location of the home, but it will affect appraisal value. If you are a seller, you might be able to convince your neighbors to make sure their properties look nice on the day of the appraiser's visit, but that is usually all you can do in regards to the location. If you happen to be selling a house or looking at a house for sale in a nice neighborhood, the appraiser has already taken that into account before arriving.