WHAT DO Home Appraisers Review?

Understanding the difference between perceived value and actual value is crucial for homeowners. Reading through the chart below should help de-mystify the differences and help you to understand the importance of each.

Perceived Value

Perceived value is influenced by subjective factors and personal preferences. It includes features and improvements that may enhance the home's appeal but do not necessarily increase its market value. For example:

• Custom Paint Colors and Decorations: While unique paint colors and personalized decor can make your home feel more comfortable and stylish, they don’t usually add to their market value. A brightly colored room might be enjoyable for you, but it could be off-putting to potential buyers who prefer neutral tones.
• Unique Themed Rooms: Rooms designed with specific themes, like a home theater or a nautical-themed bedroom, may appeal to certain buyers but don't significantly impact the home's overall market value. These features cater to personal tastes and are less likely to be universally appreciated.

Actual Value

Actual value is determined by objective factors that directly influence your home’s market price. Appraisers at Peach Property focus on these tangible aspects:

• Adding a Room or Garage: Expanding your home by adding a room or a garage is a substantial improvement that increases its usable square footage and functionality. This type of upgrade is generally well-regarded in the market and often results in a higher appraisal value because it adds practical living space that appeals to a broad range of buyers.
• Major Renovations: Upgrades such as a modernized kitchen or updated bathrooms can significantly boost the actual value of your home. Appraisers evaluate these improvements based on their quality, the materials used, and how well they meet current market standards. High-quality renovations that use durable, high-end materials and follow contemporary design trends tend to add more value to your home.

Structural Integrity and Condition

Appraisers thoroughly inspect the home’s foundation, roof, and structural components. Any visible damage, such as cracks in the foundation or leaks in the roof, can negatively impact the appraisal. Regular maintenance and repairs are essential to preserving and enhancing your home’s value. A well-maintained roof and a solid foundation contribute positively to the appraisal value.

Location and Neighborhood Comps

The property's location is crucial. Appraisers consider the neighborhood’s appeal, proximity to schools, parks, shopping centers, and public transport. Recent sales of similar properties in your area (comps) are used to determine your property's value. A neighborhood with high demand and low crime rates generally supports a higher appraisal.

Upgrades and Improvements

Certain enhancements, like a modern kitchen or additional rooms, can positively affect the appraisal. The quality of upgrades, their alignment with current trends, and their contribution to the home’s functionality are all considered. For instance, energy-efficient windows and appliances can be a plus, reflecting modern standards and potential cost savings for future buyers.

Size and Layout

The total square footage and layout of your home are significant factors. Larger homes with functional layouts and more bedrooms and bathrooms generally receive higher appraisals. Open floor plans and efficient use of space are also important considerations; homes that maximize their square footage with practical and appealing layouts tend to appraise higher.

Market Conditions

The current state of the real estate market, including supply and demand, interest rates, and economic conditions, impacts the appraisal. A robust market with rising home prices can lead to higher appraisals, while a sluggish market may have the opposite effect.

The Importance of Neighborhood Comps in Appraisals

Neighborhood comps, or comparable sales, are pivotal in determining your property’s market value. Your exact home in another city might appraise for far more or far less. Your neighborhood or town is very important contextually and may have more to do with your home price than you realized. Read more on why comps play such a big role:

Relevance

Comps should closely resemble your property in size, condition, and location. Properties with similar features and in the same neighborhood provide a reliable basis for comparison.

Timeliness

Recent sales data (ideally within the last six months) is most relevant for establishing an accurate value. Market conditions can shift, so up-to-date comps provide a clearer picture of current market trends.

Adjustments

Appraisers adjust for differences between the comps and your home to ensure a precise valuation. This might involve accounting for variances in size, condition, or features.

Single-Family Homes

These are typically straightforward to appraise due to their commonality. Factors such as condition, size, and recent sales in the area are key considerations.

Condominiums

For condos, we assess the condition of both the individual unit and the building, including shared amenities and overall upkeep. The value of condo units can be influenced by the building's amenities and the management of the homeowner association.

Multi-Family Homes

Duplexes and triplexes require evaluation of potential rental income, property maintenance, and tenant turnover. The potential for income generation plays a significant role in determining their value.

Townhouses

These properties, sharing walls with neighboring units, are appraised based on their size, condition, and the quality of the townhouse complex. Factors such as shared facilities and community amenities also influence their value.

Effective communication with your appraiser can greatly enhance the appraisal process. Here’s how to engage constructively: