When you are in the process of purchasing a home, one of the most important documents you need is an accurate home appraisal. But to fully understand a professional appraiser’s report, you have to know what they are looking for and how they are appraising the home to determine its value.
Plus, whether it’s your first mortgage or your twenty-first, the lender still has to have a professional appraiser determine the value of the home. So it’s in your interest to know what appraisers are appraising and how it impacts your home’s value and your monthly mortgage payments.
The Condition Of The Home’s Exterior
While the housing market in your area will have an impact on the value of the home you want to purchase, the appraiser operates independently and will look closely at the condition the property is in to determine its worth.
They will look at the home’s construction and how well it was maintained in order to accurately ascertain its value. The appraiser will check out the home’s exterior, especially its roof, walls, and the foundation, for signs of excessive wear, damage or defects. This will help them determine if the home is safe for habitation and how much it is really worth.
The Size Of The Lot And Home
The size of the lot on which the home is built plays an important role in deciding how much the property is worth. In the Washington DC area, homes built on large lots are often valued at significantly higher prices than those built on small lots. So the appraiser will take that into consideration during their evaluation.
The home’s total square footage and the number of bedrooms and bathrooms that are in the house also have a major impact on its worth. Plus, the appraiser will also look at the size of the rooms and how accommodating they are when figuring out the home’s appraised value.
Condition Of The Interior
The condition of the interior of the house is also crucial when assessing its value. The appraiser will look closely at the condition of the electrical and plumbing systems, the walls and flooring, as well as the windows and doors, to assess the value of the home. The condition of the kitchen and bathroom are also very important.
If there are problems with the fixtures and appliances, that could negatively impact the value of the home and how much a mortgage company would be willing to lend towards its purchase. Chipped or peeling paint and soiled floor coverings can also reduce the home’s value.
Another crucial element in determining a home’s value it the quality of any improvements made to the property. Things like new floors, the latest, most energy-efficient HVAC system, new appliances and recently renovated kitchens and bathrooms can increase a home’s overall value in the eyes of an appraiser.
Excellent renovations can add decades to the life of a home and are a good sign to appraisers. Although the style of the improvements may not matter, the fact that they were done properly and are in good condition can make a dramatic difference in a home’s value.
Extras and Additions
Homes to which useful and attractive additions have been made also tend to have a higher appraised value. Adding a swimming pool, spas and saunas can make a home more appealing and increase its worth. Installing fireplaces, insulated windows, garages and security systems can also lead the appraiser to add a few thousand dollars to the appraised value of the home if they are in good condition and functioning properly.
In a hot real estate market like Washington DC, the right extras and additions can help the value of a home to skyrocket and make it more attractive and valuable to buyers.
Calculating A Home’s Value
Real estate appraisers follow a standard process for determining the price of a home. One of the key elements in that process is the market value. Appraisers also use a comparable sales price approach. They look at the prices of homes of similar size, age and configuration that were sold near the home they are appraising within the last six months and use it as a guide when assigning a price.
Appraisers also make price adjustments based on the home’s unique features and characteristics. If the home they are appraising has a pool, an enclosed garage, or fewer bedrooms, that can make the price different than the properties of comparable size in the same community.
Getting An Accurate Appraisal
There are several steps sellers can take to ensure they get a fair and accurate appraisal and valuation of their property. One the buyer can take to any Washington DC mortgage company and have it accepted.
Some steps the home buyer can suggest be done before the appraisal are:
- Clean up the home and remove clutter
- Freshen up the landscaping
- Make needed minor repairs
- Make a list of property improvements and extras
- Be helpful to the appraiser, provide easy access and answer all questions honestly
Doing these things will enable the appraiser to easily see the property at its best and get the home the highest valuation possible. This could make The Busch Team at First Savings Mortgage or any other financial institution willing to provide a mortgage on the home at or above the current market price for comparable properties in the area.