Ways to Up the Value of Your Home

All too often, homeowners expect a higher appraisal value for their home when they put it on the market.

“When we come by, everyone thinks their house is worth a lot more. When the tax assessor comes by, it’s worth a lot less,” says Gregory Barr, chief appraiser for Graham Appraisal in Glasgow, Kentucky.

At the end of the day, even though your house might carry sentimental value to you, its worth is really just as much as someone else will pay for it.

Image result for hug the house
Photo: Hotel-R

 

Therefore, you don’t get to determine the price of your house, buyers and appraisers are the ones who really determine the price of your house.

“The market value is what a prospective buyer is willing to pay for the subject property,” explains Kelly Kellogg, owner of Appraisal Experts Inc. in the Orlando, Florida, area and author of “ABCs of a CMA,” which provides real estate agents with a breakdown of comparative market analysis to price and sell properties.

 

Getting back a low appraisal

Photo: Saving Thousands

 

So, the appraisal says your home is worth less than what you thought it was. What do you do now? According to appraisers, below are some potential reasons your home value is lower than you expect, and what to do about them:

  1. Your house doesn’t compare to others in your neighborhood
  2. Your home is near undesirable landmarks
  3. You had over-improved your house
  4. You got a low appraisal

Let’s analyze each factor.

 

1. Your Home Doesn’t Compare to That House Down the Street

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Photo: Freepik

Appraisers use recent transactions of similar homes in the area to come up with your home’s potential value – but the houses must have similar amenities and features and be in similar condition to be really comparable.

According to Carole Christensen, owner of Appraisal Minnesota is Northfield, Minnesota, homeowners are often confused and argue when they get an appraisal value that’s lower than they expected. They point to the neighbor’s house down the street that sold for more money.

“Well, your neighbor’s house has a brand new kitchen and baths and is 30 percent larger than your house and is a different design,” Christensen says.

So some homeowners have to be pulled back down to earth. The number of bedrooms in a house is also a big factor in compiling comparable sales. Kellogg says that appraisers aim to compare prices of homes with the same number of bedrooms because that detail changes what the potential buyer is willing to pay.

“Typically we find that three-bedrooms sell for a higher value variance than a two-bedroom. You want to compare apples to apples if possible,” Kellogg says.

 

2. Your home is near undesirable landmarks

Related imagePhoto: sauer-thompson.com

Christensen says that while a lake or the ocean can add considerable value to a home, properties near a freeway, a busy road, the airport, power line, or near train tracks are noisy, they rumble, and are naturally less desirable.

“If you have a highway or a railroad, that’s not conducive to a good sales price,” she says.

 

3. You had over-improved your house

Image result for big house next to a small housePhoto: Keep Thrifty

 

While improving your house and adding upgrades and amenities in it is generally a good thing, if your neighbors’ properties don’t even come close to the level of what you’ve done, there’s a huge chance you won’t get the return of the investments you’ve put in when you sell the home because the area you live in, in general, is not up to par.

So don’t make a mistake of thinking that spending $100,000 on improvements will automatically sell your house for an additional $100,000. This does not happen, especially not if you live in a track home or in a subdivision where homes sell for about the same price. You won’t get the money back because of the area.

“The improvement choices should be based on those of similar homes in the area,” Kellogg says. “When it comes to installing a solar panel system or swimming pool, you’ll likely recoup some of that cost if they’re common features for similar homes. You don’t want to be the first person to make that improvement in your neighborhood.”

 

4. You got a low appraisal

Image result for looking at a piece of paper worriedPhoto: MileStone Community Builders

Your home was appraised for less than you were hoping for? Don’t give up the fight. The calculated value is not set in stone – it shows a snapshot of the market at that time, but the market is ever-changing.

“If I’m at your house on the 15th of December and I do an appraisal, and the next day the house across the street sells, that could change the value dramatically,” Barr explains.

You can’t guarantee changes in the market, and you can’t change your neighborhood, but appraisers offer these advice:

  • Talk to the Appraiser
Image result for talking to the home appraiserPhoto: Realtor.com

 

If you think something is missing from the appraiser’s conclusion, mention it.

“Maybe the homeowner can provide the bank with some additional comparable sales data, or information about the subject property,” says Stephen Wagner, 2019 president of the Appraisal Institute.

It’s possible the appraiser was unaware of a similar house on the market that isn’t available in the public record, and any missing transactions can have an impact on your home’s value. Do your diligence.

  • Ask for the Price You Think is Best

An appraised value that’s lower than expected doesn’t mean there isn’t a possibility you could sell your home for more money.

If you believe you can get a higher offer, go for it. It may not be easy to pass off a home for more than it’s worth because the appraised value is what buyers listen to and they can certainly back out, but with that said, there also have been many success stories.

  • Fix Things Up

A new coat of paint, new flooring, tidying up, staging, and/or landscaping around the property can really go a long way. Curb appeal and first impressions count and if you put in the effort, you will attract buyers.

Image result for putting in new flooringPhoto: Minuleht

“If you’re looking to make an improvement that will help make buyers value your home more, new flooring can be one of the easier, relatively cost-effective repairs that you can do,” says Wagner.

  • Get the Neighbors to Help

    If you’re able to do it, you can also ask your neighbors to park in their driveway, which will make the street less crowded.

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    Photo: heart.co.uk

    Kellogg says the fewer cars parked on the street in a subdivision, the better for any homes on the market.

    “It’s only a slight inconvenience but the neighbors will benefit in the long run.As a neighbor, you want the person who’s moving to sell their home for the highest price the market will bear,” Kellogg says, “because that affects everyone’s real estate value indirectly.”

 

When selling your home, these are just some helpful ways to increase interest and up the value of your home.
Source: U.S. News

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