What Home Appraisal is NOT: Myths vs. Facts
Started thinking about selling your home? If you're just setting sails on that journey, you need to make sure you familiarize yourself with all the necessary details. This whole process could be quite emotional. These are your memories we talk about after all, and you should be well prepared for the most frightening part of the selling process - the appraisal. You may think it's unfair when an appraiser comes and starts valuing your home after you've already spent hours determining the listing price. You have probably invested in certain upgrades and redecorating tricks and you don't know if the appraiser will take that into account as well.
The appraisal is actually a process that will help you sell your house faster and with fewer emotions. You'll be confused, that's for sure, especially because you won't understand what adds value to your house from the appraiser's point of view. To help you see it more clearly, here are most common myths related to home appraisals.
The Real Value of the House is NOT in its Size
The real value of the house actually depends on the area and the neighboring houses, not just its size. Bigger houses are often considered to be a burden, rather than an enjoyable place. Some people don't like them as there's a lot more space to maintain, insure and heat. These are the reasons bigger houses are not more expensive and they are most often appraised for as much as the neighboring houses.
The Appraiser Does NOT Work for the Buyer
The appraiser is paid by the buyer to do his job, but he is actually hired by the lender. The lender also invests and he has to be included in the final decision concerning the price. Since all the appraisers are trained to be ethical and not to take sides, there's nothing to fear or worry about. They won't let themselves be pushed into hitting a certain value.
The Amenities are NOT All Equal
Some people decide to convert their garage to a home exercise space, giving it a purpose other than the original one. Well, if you decide to equip your home with exercise space, a bar or an in-law suite, that's great. However, converting a garage or a back garden into something they are not won't bring you appraiser's props. Austin Fernald, a home appraiser from Orange County in CA says: "Most people want to park their cars where they are safely protected from the elements and break-ins". Therefore, make sure you don't lose one amenity for the purpose of having another.
An Appraisal is NOT a Home Inspection
Basically, appraisals and home inspections are two completely different things. The only thing that is similar is having both an appraiser and an inspector poking around your home. The inspection, however, includes uncovering existing and potential problems that need or might need fixing. The aim of the appraisal, on the other hand, is to determine the objective market value of your house. In order to do that, they have to know the square footage and location. They also check the condition and quality of the electrical system, as well as flooring and plumbing. Once they gather all the necessary information, they report it to the lender.
Higher Investment in Redecorating Does NOT Mean Higher Appraisal
Understanding this myth is quite simple: if you decide to invest, let's say, $50,000 in equipping your kitchen with fancy appliances, that doesn't necessarily mean that your house will instantly receive $50,000 extra in the appraisal. If certain amenities you have don't exist in the neighboring houses, the appraiser cannot determine what those amenities are worth since there's no way to compare them. A typical buyer chooses certain neighborhoods because of the amenities it offers. If you're the only one who possesses a home theater or an expensive glass chandelier, most probably you won't attract any buyers who are interested in the area. So, make sure you consult with a real estate professional before making any big changes in your interior design. Agents know these things well and will be able to offer a true piece of advice.
We've tried to help you get familiar with the most important facts related to a home appraisal. Hopefully, you have come to understand that you need to put trust into people who know what their job is and who will help you get or make the best offer.