A lot of your home’s value is based on location and other factors beyond your or your realtor’s control. Though you cannot change the prevailing market rates for your area, you CAN make your home one of the more desirable listings on the block. By following the steps outlined in this guide, you can arm yourself with the knowledge to smoothly navigate the appraisal process, maximize your curb appeal, and stage your home efficiently and effectively!
1. Know Exactly What Goes into a Home Appraisal
First, it is important to have a solid understanding of how your home is appraised. Though it may seem arbitrary at first glance – as different appraisers will use different forms – there are specific guidelines appraisers will follow to determine your home’s worth. Knowing this process is not too difficult to grasp, especially if your appraiser is using a uniform appraisal form. You can see an example of a uniform appraisal form here.
Reading Past the Obvious
All appraisals have to mention the obvious – address, current owner, and the date of the appraisal. A standardized report will usually include details beyond this – a breakdown of the house site and details regarding the neighborhood (in terms of rural, urban or suburban, and the rate of growth). It will also mention any improvements or renovations and have a comments section where your appraiser may put an estimated worth. However, it is on the following pages where the real appraisal happens.
Cost Approach, Sales Comparison, and Reconciliation
The cost approach section gets into the square footage of your home, any upgrades, renovations, and improvements and generates a number for your property. This is then compared to other comparable homes on the market – this is one of the biggest sections on the form and it breaks down many details about your home, like porch or patio, or heating and cooling and compares your home to as many as three other comparable properties for sale. The reconciliation section is basically the professional justification for why the value was reached.
2. Consider an Early Appraisal
Barring the most extreme circumstances, selling a home is generally not a fast-moving process. Because you will usually have a good amount of time to prepare, you should consider getting an early appraisal before you begin any improvements or renovations.
An early appraisal will give you a good idea of your house’s worth as is. It basically lets you know the areas you need to prioritize before you devise a plan to prepare your home for the market and that final appraisal. Additionally, an early appraisal can bring to your attention any serious issues that you may not have been aware of – issues such as structural damage, or electrical problems – which will lower the value of your home during that final appraisal.
3. Know Your Competition
In competitive housing markets, knowing what your home is up against can help you strategize effectively to compete with other homes on the market. Going in blind is irresponsible and leaves you unaware of what to prioritize when developing your strategy.
Ask Your Realtor
Your realtor should be able to provide you with final closing prices for home sales in your neighborhood. Use this information and anything else you can find out about those closed properties and cross-compare your property to them. Analyzing what these homes went for and why will help you devise a stronger plan to make your property competitive.
Conduct Your Own Research
Download a realty app or check your local listings to find houses similar to your own. What price are they asking for and how does it compare to the price that you are looking for? What features of their property are different from the features of your property? There is nothing stopping you from hopping on your bike or getting in your car and going to these properties to check the curb appeal and get a general sense of how they are presenting.
4. Understand and Achieve Incomparable Curb Appeal
Curb appeal refers to the outward presentation of your home. It is an aesthetic game of first impressions and effectively implementing it is vital. A comprehensive academic study concluded that with proper home curb appeal (HCA) and landscaping curb appeal (LCA) you can increase the value of your home by 17%.
Home Curb Appeal
Home curb appeal refers to the presentation of the house itself. The house is the selling point, so appraisers will get their first impression of a home by examining the way it presents itself to the outside world. It is imperative that you present your home at its best and healthiest. A thorough cleaning of the exterior – doors, windows, light fixtures, and roof included – is a minimum. If you do not wish to hire a professional exterior house cleaning service, a power washer and a strong cleaning detergent can do much of the hard work for you.
Consult an Exterior Designer
If you are not aesthetically principled, it may be to your benefit to consult a professional. If you are paying for a paint job, which, depending on the right color, can boost the value of your home by as much as $6,000, you may as well also pay for the advice of somebody whose job it is to get your home looking its best. Exterior designers and landscapers are knowledgable about the latest trends and can give you design advice that is both well-informed and credible.
Landscape Curb Appeal
If your home is focal the point, the landscape should be the funnel that directs the eye to the house and, eventually, the door. Complementing your home with trees and shrubs will directly impact the value of your home. According to the same academic study linked above, specific landscaping features such as trimmed hedges, walls, and landscaped curbs can each increase your home’s value by 4%. Tree cover can add as much as 2 – 9% to your home’s value, however too much vegetation, or unkempt vegetation will negatively affect your home’s value.
5. Stage Your Home Simply and Effectively
Properly staging your home will help it sell 73% faster than an unstaged home. There are many competing theories as to how to properly stage your home, however, there are some definitive and universal points that home designers agree upon.
Crop Out That Clutter
Like any first impression, your home’s first impression matters. Overcrowding the spaces in your home will make appraisers feel claustrophobic and contribute to an overall sense of disorganization. Use your appraisal as an opportunity to host a yard sale, or donate your excess items to a charity. Here is an invaluable guide for how to value your charitable donations for when tax season comes around.
Mirrors Add Perceived Space and Light
You can reduce that claustrophobic feeling by installing a few mirrors in thoughtful places. This is especially important if your home is smaller. In line with the rule of first impressions, you want to make your home feel as spacious as possible. Collages of smaller mirrors are more effective than one large mirror in making a space seem larger. Also, placing mirrors opposite of windows will reflect more light into your home, adding to the overall natural light.
Help Potential Buyers Envision Themselves in Your Home
Appraisers are essentially authoritative voices that speak on behalf of the potential buyer. They are looking for value and for what prospective buyers want. Remove personal artwork which can distract from potential buyers being able to see this home as their home. You should also freshen paint jobs, fix loose cabinet handles and doorknobs, update linens in your bathrooms and scour the floors and walls. In essence, make your home feel like a fresh, brand new house that begs the prospective buyer to live in it. Appraisers will rate properly staged homes higher.
To learn more about proper staging, read the National Association of Realtor’s 2019 Profile of Home Staging.
Have Confidence in Your Hard Work
You can absolutely and beyond a shadow of a doubt achieve that high appraisal valuation. This guide stresses an informed and knowledgable approach to preparing your home. If you follow these steps and put the effort in, you will be well on your way to maximizing your home’s value. Always remember the five P’s: prior preparation prevents poor performance!
Best of luck!
About Author: Jennifer Bell is a freelance writer, blogger, dog-enthusiast and avid beachgoer operating out of Southern New Jersey. She writes for Home Appraising Group.