Nobody wants their home’s property value to decrease. Oftentimes there are things out of your control that affects property value.
However, there are a few things that can control and maintain value. Here’s what you need to know to avoid decreasing your home’s property value.
What Lowers Real Estate Value
It is important to know what factors can lower real estate value. Especially if you are preparing your home for sale and actively listing on the market!
Here are a few big things that lower real estate value:
- deferred maintenance
- poor or deteriorated paint
- bad neighbors
- foreclosures in your immediate area
- proximity to certain facilities/businesses.
Knowing what can lower the value of a piece of real estate is good to know. You can attempt to manage the items on the list that you can change while keeping in mind the factors that you can not.
Quick Review: How Appraisers Find Home Value
A certified Appraiser finds your home value. They give unbiased opinions of a property value and use the appraisal to find home value whenever a mortgage is involved in the buying, refinancing, or selling of a property.
A qualified appraiser creates a report based on an in-person home inspection, using recent sales of comparable properties, current market trends, and features of the home like amenities, floor plan, and square footage. This helps determine the property’s appraisal value.
The borrower typically pays the appraisal fee, which can be in the ballpark of several hundred dollars. When the appraisal value is lower than expected, the transaction can be delayed or even canceled!
Everything Buyers & Sellers Need to Know About Appraisal Gaps
5 Things That Hurt Appraisals – You Control
Some of the things that hurt an appraisal you can control. For example, reducing the amount of carpet in the home which can show damage more clearly than a wood or tile floor.
A fresh coat of paint is always a nice way to make things look better and tidying up the yard and landscaping around the home! Here are 5 things you can control that hurt home value during an appraisal.
#1: Outdated Appliances
For the big appliances like the stove, fridge, dishwasher, washer, and dryer it can be worth taking the hit by buying new ones. Compared to outdated appliances, modern features can add a decent amount to your home value.
#2: Overgrown Yard & Lack of Curb Appeal
Don’t forget that outside of the home. An overgrown yard and lack of curb appeal can also be a huge factor when it comes to home value. Landscaping and hardscaping around the home can make a lot of difference!
Take care of large trees around the home that could blow and fall in heavy winds! Buyers see trees too close to the house and it is seen as a liability.
Take the time to make sure the landscaping and tree work around the home matches the amount of care and effort that is put into making the inside of the home feel welcome and clean.
#3: Home Maintenance
If your home isn’t in great shape, maybe consider some home maintenance. A fresh coat of exterior paint or pressure wash to the exterior can make it shine and look new again. Both can really make the home stand out and are simple and cheap weekend projects.
#4: Too Much Personalization
Maybe that glitter wallpaper works for you, but it may not for someone else. Sometimes it’s best to play it safe and remove any quirky features that might alert buyers of another looming project.
#5: Improvement Projects
Keep your receipts and consider projects with a high return on investment.
What typically gets the best ROI? Kitchen and bathroom updates can be the best ROI projects to add value to the home.
5 Appraisal Factors Outside of Your Control
There are to your appraisal factors outside of your control unfortunately in your report. Neighbors that collect trash in plain sight or a gun range is set up down the street could have a negative impact on your home appraisal but it is very little you can do to change it.
#1: Current Real Estate Market Conditions
At this point, everyone knows the current real estate market conditions do what they want. The recent boom in real estate has taken most of us by surprise and is just one of those things you can’t control during your appraisal and it can go either way.
#2: Bad Neighbors
Do you have bad neighbors who have unsightly yards or maybe there has been a spike in criminal activity in your area? Every community has one or more!
Fortunately, you’re not alone! Even HOA and POAs have their fair share of bad neighbors.
#3: Not the Best Location
Being in close proximity to lower-quality schools, far away from amenities and stores and busy roads can also bring down your home value. Sometimes being in the right location can bring more demand and value to your property.
#4: Age of the Home
While newer homes aren’t guaranteed to appraise as much as older homes, older homes can go both ways.
Older homes that are well maintained can have just as much value as new construction builds!
#5: Skewed Comparable Homes or Comps
Maybe there were a lot of foreclosures in your neighborhood? Perhaps the appraiser just used some weird comparables in their report. While you can request an appeal of the appraisal it is not guaranteed you will receive it. Bad comps can be a real pain.
So if you are curious about how to improve your home value without breaking the bank, reach out to us at 828 and we can help you stage your home to give it the best chance of moving into this market.
There are plenty of things that we can offer advice on that would help knowing where to start when selling your home and during the pre-appraisal process.