How to Increase Your Home Value for an Appraisal (And Why it Matters)

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When preparing for a home appraisal, the goal will be to point out substantial improvements made to the home and avoid any impression that the home might be falling into disrepair. There are numerous factors that go into home appraisals, and not all of them are in your control — your neighborhood and surrounding amenities can influence your home’s value, as well as comparable sales prices of similar homes near yours. There are some aspects of the appraisal that focus on your home itself, and this is where you can add value and make sure your home is in the best shape.

If you’re looking to sell your home, refinance your mortgage or take out a home equity loan, you’ll need to get your home appraised. No matter your situation, it will benefit you for that appraisal to be as high as possible. In this piece, we’ll look at why appraisals matter, what your appraiser will be looking for, and how to maximize your home’s value, either through cosmetic repairs or installing additional features.

Understanding why appraisals matter

A home appraisal is a vital part of the process when you're trying to sell your home, as it verifies the value for the buyer and their lender. If the appraisal comes in under the agreed-upon purchase price, the buyer’s lender might not loan the full amount they need, and the sale could fall through.

You’ll also count on a high appraisal when you’re looking to refinance your mortgage or borrow against the value of your home. If your home appraisal is low, you may not qualify for a refinance at all, or you might need to pay for private mortgage insurance. If you are looking for a cash-out refinance, a higher appraisal will mean you’ll get more money. If you’re looking to take out a home equity loan, the appraisal will dictate whether or not you qualify, and how much you will be able to borrow.

You may also need to get a home appraised in the event of a divorce, as part of settling an estate, if you want to fight a tax assessment or if you are filing for bankruptcy.

What do home appraisers look at?

Besides the overall housing market in your neighborhood, an appraiser will take a thorough look at the inside and outside of the house to determine value. Here's what they’ll take note of.

  • External Features: The appraiser will note the age of the structure, the site, the construction quality, the roof and foundation (including any visible problems), gutters, parking, and overall visual appearance of the home’s exterior.
  • Internal Features: The appraiser looks at the square footage of the entire home and each of the rooms. They’ll look at the heating, cooling, plumbing and electrical systems and will inspect the home’s major appliances. They’ll also note the age and condition of the home’s surfaces, like countertops and floors, although they will not take personal items into account, like your furniture.
  • Upgrades: The appraiser will inspect any added features, like a swimming pool, a new roof, or a remodel. If you’ve had any major renovations done, they will check for code compliance and structural integrity. These additions can increase the value of your home, but be careful to avoid any obvious code violations.

How to increase your home’s value before an appraisal

While significant home improvements like renovations, remodels and additional features come with hefty price tags, increasing your home's appraised value doesn't necessarily have to cost you a lot of money.

While these methods might not always account for a dramatic spike in value, on the other hand, the costs of not preparing for an appraisal can be substantial. It’s important for your home to appear well-kept and have no evidence of disrepair, which can negatively affect your home’s appraised value.

Think about curb appeal

Make sure there is no cracked paint on the exterior of your home, and that the home’s exterior is clean. Fix any damaged fences. Secure and pave over loose bricks and tiles. Mow your lawn and weed your garden. Trim any unruly trees or bushes.

Get out the mop and bucket

Make sure your basement, if you have one, is dried out and mold-free. Repair any holes or cracks in your walls. Get your carpet cleaned, or wax your floors. Make sure baseboards are clean. Give your counters a good scrub. Again, it's important to think of the structure of your home — its walls and surfaces — rather than your furniture and personal items when preparing for an appraisal.

Show your work

If you’ve gotten major repairs done or made significant additions (new AC or heating, electrical or plumbing), keep your receipts. If you’ve done remodels, take photos before and after to show appraisers.

What doesn't matter in an appraisal?

You wouldn’t care so much about a stranger’s furniture choices as you would the condition and quality of the countertops, for instance. So focus your energy on giving the impression of a well-kept home, hand over relevant documents like property tax statements and receipts for documented repairs, and then step back and let the appraiser do his work.

Getting your home appraised, no matter the reason, can make even the most conscientious homeowner nervous since there is often much on the line. But try to step back and look at your home as you would a stranger’s, and focus on the things you would look for in the home if you were looking to purchase. As a general rule of thumb, structural enhancements, permanent fixtures and appliances are key here, while furniture and anything that can be unscrewed or removed likely won't impact your home's value.

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Kenny Zhu

Kenny is a Banking and Mortgage Research Analyst for ValuePenguin and has worked in the financial industry since 2013. Previously, Kenny was a Senior Investment Analyst at PFM Asset Management LLC. He holds a Bachelors of Science from Carnegie Mellon University, where he majored in International Relations & Politics. He is a CFA® charterholder.

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

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