How Do Appraisers Value Your Property?

How Do Appraisers Value Your Property?

and how to get the best price

At Generating Media we have the luxury of becoming familiar with properties around the globe at the full range of price points. It is always fascinating to become aware of what a property will list for and actually sell. In many cases, we must say we’re hit with “Sticker Shock” and often are mystified as to why one property will sell at what might be considered a tremendous value and another seems over the top.

Home Appraiser Walkthrough

We have learned that in general appraisers will do a walk-through of a house and then use either the sales comparison approach or cost approach. These home appraisals are prepared by licensed home appraisers. They look at a long list of factors that include home size, layout, and how well it is maintained. In addition, they factor in properties within the community and neighborhood and recent sales of similar homes.

When the appraiser is reviewing the exterior they’re looking at the overall structure, materials used, condition of the foundation, and landscaping features. In terms of the interior, they do not pay attention to the decor but are more focused on the cleanliness and how well it is maintained. The material used play an important role such as flooring, light fixtures, windows, and doors. Square footage of all rooms is also a very important factor.

Amenities that can increase value to your home

Amenities such as central air conditioning, heating systems, security systems, window treatments, make and model of appliances, type of kitchen cabinets, countertops, garage door openers, and fireplaces all play an important factor.

We have witnessed some homeowners provide some very important facts that help the appraiser and potential buyers through the use of documented up-grade information. This includes a brief description of the up-grade, cost of up-grade, date of upgrade, and in the event it required a contractor or outside service the name and contact information. If it was simply an appliance, they have the receipts and manuals to go with it. This includes any type of home remodeling. Building permits were also added. This has provided full disclosure. In several cases, we also saw actual architectural drawings which were a huge bonus.

Operating Cost of a House

Part of the cost of investing in a home is not just the mortgage and taxes, but the operating costs. Homeowners that can provide historical data of the operating costs such as heat cost/usage, electric cost/usage, water cost/usage, landscaping cost, and snow removal cost all help the appraiser and potential new homeowner determine the “value” of the property. This also provides a vote of confidence.

Real Estate Comps

It seems like the sales comparison approach is one of the most popular appraisal methods, which is comparing a home to others that have sold in surrounding neighborhoods. These are referred to as “comparable” of “comps”. The part we struggle with is when there are no properties that even come close. We realize it is not an exact science and very subjective. The other factor that plays a major role is the available inventory at the time of the sale. An appraiser may determine a value based on past history and the market could be exploding as there might be little is any inventory for the size and location of the properties.

Keep Your Receipts!

Our advice is to keep accurate records of all aspects of homeownership including operating costs, improvements, and receipts. We also find it interesting to review the asking price, actual selling price, and assessed price of homes. We look closely at the deviations.

When a potential buyer is looking for a home the first step in the process is to consider which town. Once the town has been established they will start looking at neighborhoods, and then the actual property. There are lots of moving parts that go into the decision.

At Generating Media we look to provide a complete menu of content that focuses on each progression of discovery. We have published videos of towns to bring out the features, personality, and spirit. Our videos including aerial footage provide an insightful perspective. Then through the interior, exterior, and aerial photographs, we focus on the individual property. The bonus comes in when we publish an actual walk-through video often using voice-over or spoke persons. Contact us and find out all we can do to provide you with the tools to sell your home.