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What do home appraisers look for?

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It helps to understand what home appraisers are looking for. This knowledge helps you know which factors you can and cannot control, how to compare your houses against others, and set realistic expectations for the appraised value.

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These are the most common factors appraisers look at:

  • Condition and quality of the property. A well-kept home will receive a higher value than an outdated home with obvious repair needs. Appraisers factor in the cost of necessary repairs when determining value. A home with upgraded materials will typically command higher values. 

  • Size and layout of the home. Size, functionality, and usability are big factors in a home’s value.

  • Exterior appearance. Your home’s first impression is its curb appeal. Fresh paint, a groomed yard, and fresh flowers can make a huge difference.

  • Recent upgrades. These upgrades can add extra value to your home and give your home an advantage over similar homes. Examples include kitchen remodels, converting a half-bath to a full bath, or adding more bedrooms and bathrooms. Make a list and dates of any upgrades, no matter how small.

  • Comparable sales. The recent sale price of comparable homes in your local area gives an appraiser an idea of what buyers are willing to pay.

Tips to prepare for a home appraisal

There are many steps you can take that are free or don’t cost a lot of money. They offer a huge return on your investment and can drastically improve your appraised value.

  • Clean and declutter. Remove clutter by purging unnecessary items, deep cleaning your home, and putting excess furniture in storage.

  • Make necessary repairs. Many repairs are cheap to fix and are just a matter of taking the time to handle them. If you’re not handy with tools, watch online videos to learn or ask skilled friends for a favor. A handyman is a cheaper alternative for small projects that don’t require a contractor.

  • Enhance curb appeal. Spend the morning pulling weeds, mowing the lawn, trimming bushes, and planting fresh flowers. It will make a huge difference in your curb appeal.

  • Make a list of recent upgrades with dates. Help your appraiser understand the time and money you’ve invested in your home. They may be willing to factor in recent upgrades and their estimated cost into their appraisal.

  • Provide relevant documentation. Show that you’ve complied with local rules by showing floor plans and permits for your renovations. Include warranties on larger items, like an HVAC system or energy-efficient windows, that add value over time.

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What can help a home appraisal?

Increase the odds of a favorable appraisal by taking these action steps.

  • Well-maintained property with regular upkeep. Ensure that all regular maintenance items are taken care of. Unfinished projects and obvious maintenance issues will hurt your home’s value.

  • Recent renovations or upgrades. Explore options to renovate or upgrade the home to increase its appeal and value, like upgrading the kitchen or adding another bedroom. Don’t over-personalize, and keep the color palette neutral.

  • Desirable location and neighborhood amenities. When buying your home, choose a location that is desirable to the greatest number of people. Make a list of local amenities that add value, like public parks, shopping, and quality schools.

  • High-quality construction materials and finishes. Use high-quality materials that extend the life of your projects and broaden their appeal. Appraisers may add value for projects that have a long lifespan.

  • Recent sales of comparable homes at higher values. Help the appraiser out by making a list of recent sales that benefit your valuation. These comps will help if you need to dispute the appraisal.

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What hurts a home appraisal?

To get the highest value for your home in an appraisal, it is important to understand what factors could reduce its value when refinancing or trying to sell your home. By knowing these factors, you can address them ahead of time or set realistic expectations.

  • Deferred maintenance or visible damage. Damage, incomplete repairs, and deferred maintenance can reduce your home’s value. The appraiser deducts estimated costs of these repairs, affecting the appraisal amount.

  • Outdated or non-functional features. An older home with outdated decor, appliances, or layouts may receive a lower value in its appraisal. An updated home offers more value to a prospective buyer and often leads to a high appraisal.

  • Lack of sufficient square footage or functional rooms. Appraisers understand the types of features and functionality that buyers are looking for. If your home lacks these features, it could receive deductions in value to compensate.

  • Negative neighborhood or housing market conditions. While trends and local market conditions are outside your control, they can cause your appraised value to rise or fall.

  • Appraisal value lower than the desired loan amount. When your appraisal comes in below your loan amount, you’ll have to make adjustments. Homebuyers will need to come up with extra cash or negotiate a lower home purchase amount. Existing homeowners will have to take out a smaller loan or wait until their home appreciates further.

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