I always enjoy throwing out an alliteration or rhyme for my titles. I think, much like "orange," there's not much I can do with appraisal (Maybe I need more coffee). I'm certainly open to ideas for next time.

Today, we're going to talk about some myths related to your home appraisal. We'll touch, briefly, on the differences between an appraisal and a home inspection (though mostly in end-result, not practice). All that aside, as I write this they're predicting our first Nor'easter of the season. Come on, snow!

First and foremost, the appraisal tends to be one of the more anxiety inducing steps of the home selling journey. It is that point where you put the value of the home in the hands of the lender (sort of) and the result of this appointment has a very strong impact on the sale actually going through. "Will it appraise?" "If it doesn't, will the buyers bail?" Oh, the drama!

One of the important things to keep in mind during the appraisal process is that this is supposed to be a neutral, emotion-free valuation of the home. If you peel back the first layer, you'll realize that the bank is the one requiring this step.

Yes, you the buyer are paying for it, but the lender hires the appraiser and has a vested interest in the results. From a broad perspective, the bank is simply making sure that they will be covered if the buyers default on their mortgage and the bank needs to take ownership.

Appraisers use a number of different tools to complete their evaluation. While inspectors are more focused on the functioning of the plumbing, electrical, insulation, etc., the appraiser is interested in how your home compares to other homes in the neighborhood.

They are looking at objective, quantifiable factors that help them determine the core value of the home. Appraisers look at the home's condition, square footage, and location as well as the general condition of the flooring and plumbing and electrical systems. The inspector is simply going to look more deeply at those systems and highlight any potential issues.

That last nugget is an important one to keep in mind when you're considering any type of remodeling project. Just because you spent (literally) countless hours installing a hot tub, home-theater, sauna or other luxury item, does not mean those translate into a higher appraisal.

If yours is the only home in the area with those items, the appraiser does not have any comps to give value to those. This also means that those items are not in high demand with the buyers in this area. The buyer in this deal may be super excited about them, but the bank (read: appraiser) is not going to assign much value to them.

The same can be said about size. The value of the home is determined by comparing it to the other homes in the area on the same sized lot. If you double the size of the home, it simply means when you are ready to sell, you may have a harder time getting the home to appraise at your asking price. Which brings us to our next point, the actual price at which the home will sell.

An appraisal is just that. The bank's (appraiser's) estimate of what the home is worth. If your asking price is $200,000 and the buyers agree to that price, whoopie for you. You've done it. But if that buyer (like me) requires financing, the bank is going to order an appraisal.

If the appraisal comes back at $175,000, the buyer has two options. They can simply back out of the deal because they aren't willing to pay more than what the appraisal states (assuming they included that contingency in the offer). Or they can pony up the $25K in cash and leave the mortgage at the $175k. At the end of the day, the bank is not going to lend more than what they deem the house to be worth (the appraised value).

Lastly, if selling is in your future, be really careful about what you do choose to remodel. As we noted above, some things are simply not going to appraise as well as you hoped.

"One of the biggest mistakes we see homeowners make is converting a garage into, well, literally anything other than a garage," Badger Realty agent Daren Levitt. "Leave your garage a garage and feel free to alter any other room in the house. After that first winter in New England, you'll know why."

Levitt is right. If you've lived in New England for more than one winter, you know how valuable those spaces are in mid-winter. Put your home gym in the basement and keep those buyers interested.

Happy selling.

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