While home prices might be on the rise, it doesn’t necessarily mean that property appraisal levels will increase. According to Quicken Loan’s Home Price Perception Index, home values assigned by appraisers were 1.93 percent lower than what homeowners had estimated in June. This recent article in The Washington Post by Sandy Gadow shares tips on what criteria to keep in mind when coming up with your own home value estimate.
Prudent homeowners may be wise to look at criteria that is similar to what appraisers use and then come up with their own preliminary estimate of value. Any problems that are found can be repaired or remedied before the mortgage application is made and before the start of the subsequent formal appraisal process.
Here are some tips:
• Look at the recent sales or “comps” in the area, and identify “like-kind” properties that include the amenities that are similar to ones that your home has.
There are online services that track the current “for sale” price and the “recently sold” price of homes in your neighborhood, such as Zillow.com and Trulia.com. Ask a realty agent to do a “comparative market analysis” for you of properties sold in the past three to six months. Try to be as complete as possible in your search.
• Do the best you can to look at the condition of the structural components of the house, including the foundation, roof, electrical and plumbing systems. Check for any obvious signs of cracks, discoloration, or structural issues.
• Look for water damage around baseboards, ceilings and faucets, and be aware that mold can cause unwanted damage. Include a review of the hot water heater, air-conditioner or heating system, propane or septic tank (if applicable) and appliances.
• The date of purchase and/or service should be posted to a water heater, or other appliance to help give you an indication of the age or condition of the unit. Many systems have a life span of about 10 years — subject to the level of maintenance provided over time.
• Compile a list of any improvements or repairs that you’ve made during the past five to 10 years and be prepared to show any permits or invoices that may have been required for the work.
• Factor in future expansion in the neighborhood, such as parks or community centers, to help your property valuation. Access to a freeway or public transportation could also give your house an advantage on many appraisals.
“Appraisers welcome input from owners to point out recent improvements or repairs or systems upgrades,” said Ken Chitester, director of communications for the Appraisal Institute, a global association of real estate appraisers based in Chicago. “Even attractive landscaping and outdoor improvements such as [fresh paint] will be taken into consideration when determining house value.”
[Read the full article here.]
