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What ruins an appraisal?

One of the big things that can have a negative affect is the age and condition of the home's systems (HVAC, plumbing) and appliances. If the local market is declining, that'll also hurt your home's appraised value.

upnest.com - What Hurts a Home Appraisal? 8 Factors You Can (and Can't) Control

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Worried About Getting A Bad Home Appraisal?

One of the last hurdles before you can sell your house is the home appraisal, a professional estimate of the market value of a home. Typically, an appraisal is ordered by the buyer’s mortgage lender (and paid for by the buyer). It reassures the buyer and the lender that the property is worth the amount of money being offered. But what hurts a home appraisal?

In order for your buyer to secure the loan, it’s crucial that the home appraisal goes well. That’s because unless your home appraises for at least the offer price, the lender probably won’t approve the loan. Because it’s so crucial, it’s important for you to take any steps you can to ensure that your home appraises for the highest price possible. You’ll need to know what hurts a home appraisal, which factors you can control, and which ones you can’t.

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Why is the home appraisal so important?

The lender’s main interest is protecting their financial investment. Your home is the buyer’s collateral for the loan. If the buyer stops making payments, the lender will foreclose on the home and eventually sell it. So, it must be worth at least the loan amount, or the lender won’t recoup their losses. Should your appraisal come in below the offer amount, it’s probable that the lender will refuse the loan. And if the buyer has a home appraisal contingency — one of the most common contingencies — they’ll be able to back out of the contract.

What Hurts a Home Appraisal: Factors You Can Control

Luckily, when you analyze what hurts a home appraisal, you’ll see that there are things you can do to raise the value. Here are some of the top factors you can control.

Recent Improvements

Any recent improvement that you’ve made to the house or the property can raise the appraisal amount, sometimes significantly. Make sure you have receipts, permits, and any other documentation ready to share with the appraiser. Keep in mind, however, that very few home improvement projects will give a dollar-per-dollar Return on Investment (ROI). You may have paid $35,000 to remodel your kitchen, but the appraiser probably won’t add an extra $35,000 to the value of your home.

Curb Appeal

Your appraisal begins the minute the appraiser sets foot on your property. Chances are, they are taking notes before they ever knock on your door. You only have one chance to make a great first impression, so make the most of it by boosting your curb appeal. Because your home was on the market, you’ve probably taken care of major curb appeal items such as painting the door, installing new landscaping, and so forth. But before the home appraisal, make sure everything still looks good and fresh. Do a quick walk-through and pull weeds, rake leaves, and trim any dead branches. Also, make sure the lawn is mowed and well-tended.

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Maintenance

When considering what hurts a home appraisal, one large factor is maintenance. Your house needs regular and seasonal maintenance to be in its best condition. The things you don’t take good care of could end up costing much more. And an appraiser will notice if you haven’t taken care of these small maintenance items. Before your appraisal, make sure you take care of items such as caulking tubs and showers or weather-sealing windows and doors.

Condition of the Home and Appliances

If your house is already under contract before the appraisal, you won’t want to put more money into it by replacing appliances or systems (HVAC, plumbing, etc.). Those are big-ticket items you’ll want to take care of before putting your home on the market. However, you can make sure that everything is clean and functioning properly. Do a thorough cleaning job: wipe down the insides of appliances, clean grout, sweep and mop, etc.

Does a messy house affect an appraisal?

In general, no. Appraisers are professionals who are trained to look at factors that affect the value of the home. Messiness isn’t one of those factors.

Do home appraisers look in cabinets?

They might. Technically, they don’t need to look inside the cabinets. However, they might check the cabinets if they see broken doors or hinges or obvious signs of infestations.

What Hurts a Home Appraisal: Factors You Can’t Control

Of course, when you look at what hurts a home appraisal, you’ll find that some factors are out of your control. You can’t do anything to change how they affect your appraisal, but you should be aware of them.

Local Market

When it comes to what hurts a home appraisal, one of the most important items that’s out of your control is the local market. An appraiser will take the market trends into account when deciding on the value of your home. In particular, they’ll use supply and demand to forecast whether the price of your home will go up or down. If your home is in an area where prices are declining, that will probably have a negative impact on home prices. But if you’re in an area where homes are in demand, your appraisal will come in higher.

Location

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Your appraiser won’t just look at your home, they’ll also look at the surrounding area. How is the neighborhood, overall? If the houses are generally well-kept and the future looks positive (new schools being built, excellent employment opportunities), then the appraisal will be higher. But if you’re in an area with a high number of vacancies or foreclosures, that’ll have a negative impact on the final appraised value.

Size of the Home

The appraiser will also look at the size of the home and the property. Mostly, the larger the home, the higher the value. However, sometimes a house is “overbuilt” — it’s too large for the property, leaving little to no outdoor space. In this case, the size of the house can actually cause a lower value, since most homeowners want a backyard that’s proportionate to the house. The appraiser will also take the number of bedrooms and bathrooms into consideration when determining the final value of your home.

Age

One more factor that’s out of your control in a home appraisal is the age of your home. The older your home, the lower the appraised value. Newer homes (in the last 10-20 years) have been built with more updated building codes and are unlikely to have issues. In general, they’ll appraise for a higher value. However, if your home is in a historic district, that can actually raise the price despite it being an older home. Your Realtor can help you get your house ready for an appraisal when they’re working with your listing, and UpNest can help you find that Realtor. With our free service, you’ll receive competitive proposals from three to five of the top agents in your local market. They can guide you through the entire process of selling your home, including getting a high appraisal. Our network agents have been carefully vetted and often offer competitive, lower than average commission rates to UpNest customers. There is no obligation to sign up with one of our network Realtors, but when you can potentially save thousands on commission – why wouldn’t you? If you’re ready to get started, just enter your zipcode below!

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Frequently Asked Questions

upnest.com - What Hurts a Home Appraisal? 8 Factors You Can (and Can't) Control

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