ADDING VALUE TO YOUR HOME AND HELPING YOUR APPRAISAL

By understanding appraisals and being prepared for the real estate appraisal inspection, you’ll know how to maximize your home’s appraised value.  In today’s real estate market, that’s good information to know. And may be the difference between qualifying for a mortgage and not qualifying.

First, lets look at ​​what is the main driving force behind a home's value. The answer is simple; comparable properties sold in the open market. To be more specific, competitively similar homes to yours, that have recently sold, in your immediate area. This is what ultimately determines the value of your home and what the consumer is willing to pay. It is the appraisers job to collect, verify, and analyze this information and report the results.

Before we continue, the important thing to remember is that cost does not equal value, and adding value to your home, generally will cost you money. Very rarely does one get 100% ROI for remodeling and renovations.  However, depending on your needs and goals, a little strategic planning and investing can increase the overall value of your home over time. ​

SO... HOW DO I ADD VALUE TO MY HOME?

Kitchens and Bathrooms

Some brokers jokingly say, "I sell kitchens and bathrooms, not homes". So it makes sense that this is where most homeowners start making their larger investments in updates.
However, if you are thinking of selling your home in the near future, be careful. An investment in a complete kitchen remodel might not be your best option. It might help sell your home quicker, but according to Remodeling magazine, a major mid-range kitchen remodel in Southern Maine will cost about $53k and return only $36k in resale value (67%). So, if your kitchen or bathroom is outdated, but still in good condition leaving it as is, could have an economic advantage. Also, your choices for new updates might be different then the general public. Some consumers actually prefer the opportunity to buy a property that has "good bones" and is in good condition. They can update it to their needs and tastes, and not be stuck with yours.

Basements and Attics

Many homeowners covet that refinished basement, but that doesn't mean appraisers look at it the same way. Appraisers use "Above Grade" living area for their analysis. Finished "Below Grade" living area does get some consideration, but any investment in remodeling below grade does not add as much value as above grade.

​According to Remodeling magazine, a mid-range basement renovation in Southern Maine that cost $60k will recoup 63% of that in added home value. That's not as good as an attic bedroom, which will recoup 76% percent of its cost. ​

Since it is already above grade, most remodeling done in attic space that is heated and finished to the level of the rest of the house, will add to the Gross Living Area (GLA). This carries more weight in an appraisers analysis than any finished area below grade. Most importantly, look to see what your immediate market has to offer regarding recent sales with finished basements and "buyer perception".  If finished basements are not common, carefully consider the amount of investment you are willing to not get back. ​However, if every home on your block has a finished basement, making that investment becomes less painful, as it will contribute more to the overall value when it comes time to sell.

If you do decide to make the investment in a basement remodel, there are a few things to review that could make a difference down the road and affect your value. If your lower level shows signs of water or moisture—foundation cracks, for instance, resolve problems first with perimeter drains, a sump pump, and back-up generator. Know local ordinances regarding the required number and size of egresses, and if you are allowed to outfit a full kitchen or additional bathroom. You don't want any red tape of non-permitted renovations to bog you down when it comes time to sell your home.

Curb Appeal and Garage Doors

Although not a quantifiable factor appraisers use in the analysis, brokers will tell you that curb appeal is important part of "packaging" your home for sale.  Upping your curb appeal can have a huge impact on how long it takes to sell. 

There are other ways to improve curb appeal, such as:
● Landscaping (Check out this geat article here) 
● Upgraded outdoor lighting
● New exterior paint
● New front door

However, one overlooked opportunity to adding visual appeal is with a new garage door.  Landscaping and painting are great, but they can be costly.  If you do those things but neglect your garage door, you may not be getting all the curb appeal you can.  A garage door is one of the first things a prospective buyer sees when they pull into the driveway. Psychologically, a high-quality, attractive garage door gives the impression that the garage itself is superior. 

Compared to the cost of other home improvements, a garage door upgrade can be done for relatively little money. If you are trying to add value to your home while staying within a strict budget, replacing your outdated garage door is a good way to do it.  According to Remodeling magazine, the ROI in New England for a mid-range  garage door replacement is 84% and for Southern Maine it is is 110% !! 

For more way to add curb appeal to your home and front yard, check out this in depth article by Isabella Caprario from Porch.com.

CAN I POTENTIALLY ADD VALUE TO AN APPRAISAL?

Provide Your Own Comparables
If possible, provide your appraiser with at least three solid and well-priced comparable properties. Although it will not raise the value of your appraisal, it helps insure that they are getting price information from homes that you feel are really similar to yours. It is especially helpful if you include any private sales you might know of that were not listed with a broker or found on MLS.

Records
If possible give your appraiser records of the repairs and upgrades you've made to the house over the past 5, 10, and 15 years. Don't forget to highlight all-important structural improvements to electrical systems, heating and cooling systems - which are harder to see, but can potentially boost an appraisal. What the appraiser knows about comparable homes is what he or she has learned through public and MLS records. Make sure they know about all the "extras" in YOUR house.

Overall Condition

Consider the overall condition of your home prior to the arrival of the appraiser. Remember, the appraiser is going to compare your property to other homes in the area that have recently sold or are on the market. Anything about your home that is superior to those properties will raise your home's value. Make your home look as finished and as nice as possible; don’t leave any unfinished painting or renovation jobs in limbo. Look at your home with a critical eye, and if need be, repair driveway cracks, reattach loose gutters, make sure no shingles are loose, replace broken windows and light fixtures, and replace rotten wood trim. None of these fixes should be expensive, but every little bit of maintenance makes your home look better in comparison to other homes.

REMEMBER...

​What you spend on updates may or may not raise the value of your home by the same amount. Don’t expect that $50,000 kitchen to raise the value of your home $50,000. It may or may not, depending on the market reaction to a new kitchen. One last tidbit – don’t worry about how clean your house is. Appraisers don’t take that into consideration. But don’t leave any unfinished painting or renovation jobs in limbo. Get those done and you’ll do your appraisal a favor.