There are things that can hurt a house appraisal and cause your appraisal to come back lower than you may have expected. Of course, keep in mind that there are some factors, like the sales price of comparable homes in your area, that may be beyond your control. Staying on top of the market conditions in your area and knowing if your home has one of these common issues can at least help you avoid the shock and know what to expect when you have your appraisal done.
Unique Or Rural Homes
If you have a unique or rural home, there’s not much you can do to change that. The reason having a unique or rural home can be a problem is that it can be difficult to assign a value to unique houses or rural properties because of a lack of comparables. There are far fewer homes in rural areas, so it may be hard to find multiple homes that have sold in the area. And unique homes are called that for a reason – no other home is like it. So how do you find similar homes to compare it to?
When appraisers come across this issue, they may have other options, like looking for real estate comps in competitive neighborhoods, finding a fit between the top and bottom price inside the market or giving a range in value instead of an exact number. Of course, these estimates are less precise, which means the home could end up being undervalued.
Outdated Systems, Appliances and Interiors
Updating appliances or any major systems, like plumbing, electrical or HVAC, can be costly. If yours are outdated, it could affect the overall value of the home. If the interior hasn’t been changed for decades, it may not appeal to buyers, which can also cause the value to decrease.
Outdated features like these could also signal that the home has not been taken care of properly and more issues might lie beneath.
Structural And Other Construction Materials
Construction has changed over the years and builders have found new methods, technology and even materials that can make the home stronger, more energy-efficient and safer. Because of this, it could make your home more valuable.
Some homes, particularly older homes, were built with dated materials that are now seen as hazardous. This includes things like asbestos and lead-based paint. Even if the materials are safe, your home may not be as energy-efficient if it hasn’t been updated. This could also affect value. This is especially true for old windows and doors.
Roof tiles and siding that are outdated, worn out or damaged can be pricey to fix, so that could also be a major issue that can drive down value.
FAQs
There are many things that can hurt a home appraisal, such as owning a unique home and having outdated appliances, home systems and other structural issues.
What not to say during a home appraisal? ›
As a realtor or a homeowner, you should avoid saying things like: – Is it going to come in at this “value”? – I'll be happy as long as it appraises for at least the sales price. – Do your best to get the value as high as possible.
Why would an appraisal be denied? ›
Appraisal Uncovers Major Flaws Impacting Safety or Value
If severe enough to materially impact valuation beyond simple repairs, the risk of denial increases. This most often occurs with FHA loans, where the appraisal must take into account condition and safety issues with the property.
What makes a home appraisal lower? ›
Your real estate agent will take the lead in pushing back on a low appraisal. If they find a discrepancy in the report, they can ask for a correction/revision. Some common problems that can lower an appraised value include miscalculation of square footage or failure to include garages/sheds or recent renovations.
Does a messy house affect an appraisal? ›
Your Home. The appraisal professional who performs your appraisal is not concerned with whether or not your dishes are done, or your laundry is put away – these things don't affect the value of your home, and the value of your home is what an appraisal is all about.
Do Appraisers care about cleanliness? ›
The standard, professional answer is, of course: “No, it won't affect value. Appraisers are trained to look at the structure and layout of the house, and overlook the sinkful of dirty dishes. Don't worry.” The truth, however, is a little more complicated.
Does flooring affect appraisal? ›
The main way that flooring affects your home appraisal in this way is by means of consistency. Contrasting floor colors and textures butted up against each other can detract from your home's overall style, and thus it's value. Make sure you get your carpets deep cleaned before you get your home appraised.
How to fail an appraisal? ›
A home can fail an appraisal if it doesn't meet the standards for the loan. In this case, the lender may decide that problems with the home's condition are too extensive to repair and may reject the home. Otherwise, the lender can require repairs that must be completed before the loan can be approved.
What are the mistakes during appraisal? ›
Recency Error: Recency error in performance appraisal is all about giving disproportionate weight to an employee's most recent performance rather than considering their overall performance over a specific period. This bias can lead to overlooking long-term achievements or progress.
Can you get denied after appraisal? ›
If the appraiser finds your home is worth less than its sales price, your loan could be denied. However, you may be able to appeal the appraisal if you believe the appraiser missed important information relative to the home's value.
Exterior improvements to increase home value for appraisal
- Fresh paint. ...
- Install new garage door. ...
- Spruce up front door and porch. ...
- Kitchen and/or bathroom update. ...
- Freshen up walls. ...
- Make minor repairs. ...
- Install shutters. ...
- Check that everything works. Turn on every appliance and switch to make sure it all works properly.
What Affects Home Appraisals? The appraiser will be looking at your home's features, age and condition, then compare it to other similar homes in the area and what they sell for. Because your home's value is based on the value of similar homes in the area, the local market will have a big impact on your appraisal.
What adds the most value to a home appraisal? ›
Options to maximize your home's appraisal value can include bolstering the property's curb appeal, documenting home upgrades, making minor repairs, deep cleaning the home and doing your own comparison analysis. It's also important to accept what you can't control.
Do appraisers look in showers? ›
Similar to kitchens, bathrooms are inspected for quality, condition and materials. An appraiser looks at whether it's a full or half bath, whether it has a decent shower, updated lighting, quality counters and looks for signs of mold.
Do appraisers look under sinks? ›
Do Appraisers Look Under Sinks? Yes, you can expect a home appraisal to check under the sink to make sure there isn't any water damage, mold issues or problems hiding. Don't stress about the storage of bags and dish soaps but do make sure the area is clean and accessible.
What to say and not say to an appraiser? ›
Just keep your communication to the appraiser about the facts of the home and neighborhood, how you priced the house, and any other relevant information you think the appraiser should know. And remember, don't discuss value. Don't pressure the appraiser to 'hit the value' and you'll be fine.
Do Appraisers look in showers? ›
Similar to kitchens, bathrooms are inspected for quality, condition and materials. An appraiser looks at whether it's a full or half bath, whether it has a decent shower, updated lighting, quality counters and looks for signs of mold.
Do Appraisers look under sinks? ›
Do Appraisers Look Under Sinks? Yes, you can expect a home appraisal to check under the sink to make sure there isn't any water damage, mold issues or problems hiding. Don't stress about the storage of bags and dish soaps but do make sure the area is clean and accessible.
Do Appraisers adjust for bedroom count? ›
Bedroom adjustments are typically only made when the bedroom count limits the functional utility. A typical suburban home will have between 3 and 5 bedrooms above grade. As long as it has 3 bedrooms I do not adjust, unless the evidence is clear that an adjustment is warranted.
