5 Factors That Impact Your Home Appraisal Value
When it comes to determining your home’s value, a home appraisal is one of the most crucial steps in the buying, selling, or refinancing process. Appraisers assess several factors to arrive at an accurate market value. Understanding these factors can help homeowners maximize their appraisal results. In this post, we’ll explore five factors that impact your home appraisal value.
1. Location, Location, Location
One of the biggest influences on a home’s value is its location. Homes in desirable neighborhoods with good schools, proximity to amenities, and low crime rates tend to be appraised at higher values. Market trends in your area also play a role—whether prices are rising or falling will impact the appraisal.
2. Home Size and Square Footage
The size of your home is a key factor in determining its value. Larger homes generally appraise for more, but how the space is utilized also matters. Appraisers will consider livable space, finished basements, and the overall layout when determining value.
3. Condition of the Property
A well-maintained home will naturally have a higher value than one that needs repairs. Appraisers check for structural issues, roof condition, plumbing, electrical systems, and more. Even cosmetic issues like outdated kitchens or bathrooms can affect the appraisal.
However, appraisers are not home inspectors; they observe superficial or readily observable deficiencies. Their role is to evaluate how the property's overall condition impacts its market value, not to provide a detailed analysis of potential underlying issues. For a deeper evaluation of a property's condition, a separate home inspection may be necessary.
4. Comparable Sales (Comps)
Appraisers look at recent sales of similar homes in your neighborhood to assess value. These comparable sales, or “comps,” provide a baseline for determining what your home is worth in the current market.
5. Upgrades and Improvements
Major home improvements, such as kitchen remodels, updated bathrooms, completing a basement, or adding square footage, can increase your home’s value. However, not all upgrades are valued equally, so it’s important to invest in projects that offer the best return.
Final thoughts
Understanding what influences your home appraisal value can help you better prepare for the appraisal process. If you're considering selling or refinancing, consider addressing any issues that may impact your home’s value before the appraisal.