When it comes to determining your home value, many options are weighed. Even so, this may not reflect the actual sale price of the property. Below are a few guidelines on what they might be looking for and how appraisers determine your home value and create the report that shows in depth information that helps buyers and sellers.
First, What Is an Appraiser?
Most requirements that appraisers must meet are first being licensed and then completing the required amount of hours of education in this subject. Therefore, an appraiser is likely capable of creating a decent report and appraisal value of your property. Some appraisals may be even required to close on a sale of a property.
Finding Properties Appraisers Choose From
Typically, most appraisers will compare their findings with properties nearby of a 1 mile radius and sold within 60 days and one to be within 6 months prior to current appraisal date. Then they will make sure square footage is similar.
Lastly, they will compare the age of the home, the bedrooms, and baths. As a result, a likely fair market price will be developed from the appraiser and delivered to you and possibly your lender if required. It takes about an hour to do a walk through and sometimes it is good to be there to let appraisers know what has been done to the property if they are not aware.
Why is Price per Square Footage So Important?
Calculating price per square foot is as follows, take the appraisal price divided by the square footage of livable area inside the property. For example, the total livable area of a home that is 3 bedrooms 2 bath, is 1,433 sqft. We see average similar homes are priced around $280k. So we take 280k / 1433 which is $195 price per square foot.
This is a powerful number used to quickly compare how well and price a home listed for sale is. For instance, if average similar homes are asking $220 price per square foot, then we know that our $195 price per square foot number is less which is more attractive to buyers. Knowing this number is key to making sure your property will sell in a timely manner and can be used to see how well your property compares with others around.
How Modern Updates Affect Your Home Value
To see great results in renovations, it is best to do everything in one go. Meaning to plan out a full rebuild if possible. There are FHA loans that help home owners keep up to date their property with low interest loans available to everyone. If permitted, changing countertops from dated wood to modern granite along with replacing the roof can add reasonable value to your property for example.
Having public water hookup made available to your home or completed can add great incentive for buyers to purchase your property compared to those on well water. Therefore, public water hookup can add value to your property as well.
Now when appraisers come by and check out all the modern updates, they should be able to recognize the work done and value the property accordingly. However, this is where it can be a good idea to give the appraiser a call and provide more information about the updates if they haven’t asked already.
You can now see what it takes of how appraisers determine your home value. Knowing this will help you in achieving the best possible price for your home. By learning what they look for, you can be sure there will be no surprises with their reports and responses. In addition, you can be more aware on knowing how they will price your home so that you can add value to areas your property needs most.
So that is all for now, thank you for reading. How do you think you can add value to your property? Comment below. And if you want more information like this, be sure to sign up to my monthly real estate newsletter!
Until next time, see ya!