Whether it is a primary residence, an investment or a vacation home, purchasing a property is one of the biggest investments people will make – and a complex financial transaction. As such, it is vital that the home be appraised so that a buyer might know what they can expect to pay, or what a seller may expect to receive.
While it may seem like a simple part of the mortgage process, it can be a source of stress if expectations are not met for both homeowners and potential buyer, putting the sale in jeopardy. In this post, we will discuss the aspects of a home that may negatively affect its appraisal.
What is Property Appraisal?
Before discussing what can hurt a home’s appraisal, it is important to first have a basic understanding of what this process entails.
Simply put, appraising a property is estimating its market value. The purpose of an appraisal is to provide an impartial estimate of a home’s worth in order to protect the interests of all involved in a real estate transaction.
Importance Of Property Appraisal
Property appraisal is not only important in a sale transaction, but also in refinance, estate planning, and insurance situations.
In a sale, an appraisal can help to set expectations for both the buyer and the seller. If the home does not appraise at or above the purchase price, it could mean that the buyer needs to bring more money to the table, or the seller may need to reduce the price of the home.
What Do Appraisers Look For?
When looking at a property to appraise, an appraiser must consider physical aspects of the home, like location, size and construction quality.
Cleanliness and Interior
While a cluttered home does not directly affect a property’s value, it does create a negative impression. Similarly, it may also indicate to the appraiser that the property isn’t well taken care of and hiding additional issues.
First impressions matter, and it is important that an appraiser sees the home at its best. If a home lacks curb appeal and doesn’t appear as up to date as the neighbours before even walking in the door, it will turn off potential buyers and affect your appraisal value.
Outdated or Broken Fixtures
Something as simple as a dated or broken fixture can also bring down the value of your home. Potential buyers may see this as a sign that the home has not been well taken care of and that other repairs may be needed.
Kitchen and bathroom upgrades continue to be two of the best investments a homeowner can make and they can benefit from even small renovations such as replacing outdated vanities, lighting fixtures and hardware.
It goes without saying that homes in need of repair can negatively affect its value. If a buyer sees that the property needs expensive repairs, they will often decrease how much they are willing to offer to compensate for the repairs that would have to make and pay for.
Give Your Home The Value It Deserves
Define Property are local industry leaders in real estate, property management, and property appraisal services. Define Property’s firm commitment to professionalism and attention to detail with uncompromised strategic marketing, genuine client service, and superior sales and negotiation skills guarantee a successful outcome for buyers and sellers at any price level.