This question along with, “Is there anything I can do to make it appraise for more?” are typically a part of every listing appointment I go on. I asked Greg Lane, with Timberlane Appraisal—what his response would be to that question.
An appraiser will consider the same things a buyer will consider in the estimate of market value. For example, overall condition, quality, economic and external factors. The first two can be controlled by the owner to an extent, but the latter two are sometimes beyond our control as a homeowner. For example, if a large manufacturing company or military base suddenly closes, this could impact the market and the appraiser should know this. If interest rates steadily rise, this could cause a slowing of the market as more buyers “sit on the fence.” Or what if a home situated on the corner of a busy road, close to an industrial facility or next door to a neighbor whose home is in disrepair, this may beyond your control but could impact your market value.
Owners should concentrate on what they can control, like overall condition. The appraiser’s first questions are often, how old is the roof, the HVAC system and the windows. These are the Big 3, typically some of the most expensive items to repair and are expected to be in good working order by most buyers. Other items such as functioning appliances, plumbing and electrical systems, a solid and level foundation are also considered. But the appraiser is not a home inspector; they are doing a through visual inspection, not a detailed physical inspection. They can only comment on what is readily apparent or in not working order at the time of our inspection.
Along with the major building components, both buyers and appraisers will consider the overall functionality, quality and condition. The floor plan can often not be altered, but could certainly be staged appropriately. Interior quality can be upgraded, like adding molding throughout the home, built-in cabinetry, upgrading kitchen appliances or installing new stone countertops to replace the old Formica. Condition is probably the most apparent to both buyers and the appraiser. We should not judge a book by its cover, but some buyers do not even make it to the front door or over the threshold. If the exterior needs paint, the landscaping needs some love and the front door is rotting, this could impact the marketability and the appraiser’s judgment. We are human too, so if the home smells bad, the carpet needs cleaning, the roof is leaking, and the toilets don’t flush, the condition rating of the home will decrease.
In summary, control what you can, keep the major components in good working order, upgrade the home as necessary and make sure the home is in good condition. This, along with creating a list of improvements you have made to the home, might help for a more positive appraisal experience and a higher overall estimate of market value.
Menza Krause, Realtor®