What Factors Determine an Appraisal?

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If you’re buying or selling a home, knowing about appraisals is very important. Over the last five or six years, appraisers have been held to the wire, so to speak, and their jobs have changed as far as what they can do and how they process an appraisal. This affects you whether you’re trying to buy or sell a home. Here are some of the things to look at so you’re prepared when the time comes:

1. Location. The first thing an appraiser looks at is where is this home located. Is it in a neighborhood? If so, they’re going to want to compare homes in that same neighborhood. If they have to go out because there aren’t enough comps, they likely won’t venture out farther than a mile.
2. Square footage. In this situation, size does matter. You can’t compare a home that’s a lot bigger just to attribute value. Same goes for being smaller. An appraiser looks at homes based on the price they sold, not square feet. As a seller, be mindful of that when setting a price. As a buyer, be mindful when making an offer. If the square footage isn’t within 10% smaller/larger, the appraiser might extend that range to 15% or 20%, but they’ll always start close to the same size of the subject property.
3. Property age. Appraisers don’t consider homes that are brand new as comparable with homes that were built in the 70s or 80s. If you’re looking at homes that have just sold and just been built, we can’t use those in an appraisal situation.

Some more factors to think about that could affect the value of your home is if you’re in a unique area, a rural area, have a large yard, or even have a custom home. Those kinds of things can add value to your property and it will allow the appraiser to make adjustments that they might have otherwise not been able to make in a traditional neighborhood.

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Location, square footage, and 
property age are determining
 factors for appraisers.

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Keep in mind, if you do have upgrades or renovations in your home, have numbers available to share so they know what that value is. We never get the exact amount back, but just knowing that value could help them give you a boost.

If you have any questions about appraisals or anything regarding real estate, just give us a call or send an email. We’d love to talk to you.