Whether you’re thinking about selling your home, borrowing from your home equity, or canceling private mortgage insurance (PMI), it’s worth considering how to increase home value for an appraisal.
While you can’t control every aspect of how your home is valued, properly preparing for a home appraisal can assist in making sure credit is given where due.
If you’re selling your home to a buyer prequalified for a home loan, it’s important to prepare for the appraisal. This step will be required before closing to determine the amount of money a lender is willing to provide.
Home values across the nation recently increased an average of 19% in a single year and are expected to rise an additional 5.7% in 2022. This may encourage homeowners to put a portion of their equity gains toward a remodeling project in the near future, but they’ll need an appraisal to obtain a home equity loan or take out a home equity line of credit (HELOC).
Let’s take a closer look at what you can do to increase your home’s appraised value, including light-lift projects as well as larger investments.
Start with a free online home value estimate
An easy step to take before an official appraisal is to look up your home’s estimated value using a free online home valuation tool like HomeLight’s Home Value Estimator (HVE).
Our HVE combs public data including tax records and assessments and pulls recent sales records for other properties in your neighborhood. Using a short questionnaire, we also factor in specifics about your home such as the property type and described condition.
Input your address, and we’ll provide you with a preliminary home value estimate in under two minutes. Although it’s not a substitute for an appraisal, an online home value estimator is a helpful starting point to orient yourself in the appraisal process.
|Option to increase value for appraisal||Estimated value added in 2022*|
|Add curb appeal||$12,000|
|Install new garage door||$2,800|
|Paint home exterior||$7,600|
|Update kitchen (midrange)||$18,900|
|Update bathrooms (midrange)||$14,700|
|Make minor repairs as needed||Reduces appraisal report value deductions|
Want to increase value before the appraisal? Avoid these mistakes
What you perceive to be the value of a home upgrade and how an appraiser values the same improvement can be starkly different. While you may love the look of crown molding in every room of your home, for example, the cost of that addition likely won’t transfer into your home’s appraised value. The same goes for a high-end kitchen remodel or converting a garage into a living space.
“It’s not so much that it’s not worth it, the problem is an appraisal has only so many line items to it, so with that you can’t itemize each individual aspect,” says Jason Axtell, a Certified Residential Appraiser and owner of Home Valuation Services of Arizona, which serves Maricopa and parts of Pinal county in Arizona.
Don’t invest in anything that might be considered personal property
When appraising a house, appraisers cannot account for personal property. This is considered anything that can technically be moved, including sheds and above-ground spas.
“Unless it’s a permanent fixture that’s tied down to a concrete slab or something like that, then it’s moveable and can be considered personal property,” Axtell says.
Don’t add anything that’s highly unusual for the neighborhood
If you’re the only person in your neighborhood to have a putting green and Olympic-sized pool in your backyard, then you probably won’t see the full value of those improvements reflected in your appraisal.
“If it’s not typical for the neighborhood, I’m not going to give you credit for it,” Axtell says. “Sure, you want the return on the investment, but you’re not going to typically see that in an appraisal report.”
List of upgrades to increase appraisal
Increasing a home’s appraisal value doesn’t always require a great deal of time and money. In fact, investing in big expensive improvements usually won’t recoup your spend dollar for dollar. Instead, focus on some of these distinct tasks that are known to carry weight with appraisers and typically have a positive ROI.
Exterior improvements to increase home value for appraisal
Basic yard care
Though it’s not at the top of their list, curb appeal does play a role in how an appraiser values a home. Their job is to look at the overall condition and quality of the house as well as the property. Tidy up the grounds, remove any dead trees, repair walkways, and seal driveways.
“The one thing that isn’t going to hurt you is if your home looks well-cared for,” Axtell says.
When you go to actually sell to a buyer, an average cost of $340 in basic yard care can garner upwards of 539% ROI.
Applying a fresh coat of paint to a home’s exterior can quickly make an aging home look 10 years younger.
Though the average cost of doing this is about $3,000, it adds an estimated $7,571 in resale value for a 152% ROI, a recent HomeLight survey found. While scaling your home, most professional painters will also make any minor repairs to its siding, such as nail down warped wood or caulk any gaps or cracks.
Install new garage door
The Uniform Residential Appraisal Report specifically requires appraisers to mark whether a home has a garage and how many cars it holds as well as whether they see any physical deficiencies with the property. If your garage door looks worse for the wear, consider investing in a replacement. A recent study of top HomeLight agents found that installing a new garage door is estimated to have a 133% ROI.
Spruce up front door and porch
The front door and porch are some of the first things appraisers and prospective buyers see when they approach a home. If you don’t get the entire exterior of your home repainted, it’s worth at least having these items freshened up to make a good first impression.
Front porches in particular have come back into fashion since the start of the pandemic, as it serves as a safe way to visit with neighbors and keep up with what’s going on in the community. According to a recent HomeLight survey, agents estimate from pre-COVID times to now that the dollar amount a front porch adds to a home has increased 61%, from $3,526 to $5,686.
Interior improvements to increase home value for appraisal
Kitchen and/or bathroom update
Recognizing how heavily people value kitchens and bathrooms, appraisers pay especially close attention to the condition of and materials used for these areas of a home. Of all the interior spaces, these areas can often have the greatest dollar-for-dollar ROI when updated smartly.
“When you’re talking about improvements, you can usually get a pretty good return on stuff like kitchens and baths,” Axtell says.
However, every circumstance is different, so it’s good to discuss with a professional what is worth replacing or resurfacing and what isn’t.
Freshen up walls
Fill in any nail or tack holes, touch up the paint, and repair any damaged trim. While cosmetic in nature, these sort of details make a difference in how appraisers and potential buyers perceive a home’s value.
“When you walk into a house and it looks pretty darn clean and you don’t really see any issues, it’s kind of like, ‘Okay, this house has been well kept,’” Axtell says.
Make minor repairs
This is the time to tighten up any loose railings, leaky faucets, or runny toilets. These are easy fixes that if taken care of can avoid any unnecessary value deductions.
“If you have a lot of minor things that need to be corrected, then it adds up and impacts the condition,” Axtell says.
If you’re looking to add a little extra style to your home while still keeping the appraisal in mind, Axtell says interior shutters with tilted wooden louvers are a good addition.
“Shutters are always a nice feature for a lot of folks to put in, and you can usually get a pretty good return on them,” he says.
Check that everything works
Turn on every appliance and switch to make sure it all works properly. Heating and cooling systems are especially important since they’re considered necessary for a home’s livability. Fix anything that’s faulty.
More tips to prepare for a home appraisal
Provide a list of improvements
If you want to make sure your home gets full credit, provide the appraiser with a clear list of improvements you’ve made and when they were completed.
“A lot of times I go into a vacant house and I have no idea what’s been done to it,” Axtell says.
While Axtell can do his job without this information, he won’t necessarily know that the AC unit was replaced recently or that the patio was just installed last summer.
“Quite honestly, that helps the appraiser include it in the report, shows that the house is being maintained, and helps solidify the value for those improvements,” Axtell says.
Do your own comparison research
Henry Herrera, a top real estate agent in San Antonio, Texas who sells properties 58% faster than other agents in his area, says that providing the appraiser with a list of similar properties that recently sold in your area (known as comparables or comps for short) is usually a good idea.
“It adds supporting documents for their case, so the more information we can provide them with the better,” Herrera says.
Axtell says not all appraisers appreciate this as much as others, but he finds it helpful for the most part.
Try to be present for appraisal
Though it’s important to give appraisers space to do their jobs, having a homeowner on the property during an appraisal can help the process move more smoothly and make sure the appraiser gets everything he or she needs.
This includes providing access to every area of the property and answering any questions the appraiser may have.
That said, try not to be a distraction.
“Don’t follow the appraiser around the entire property,” Axtell says. “It’s not so much that the appraiser wants to be left alone. If they’re distracted by a lot of conversation, they may forget to take a photo or something, which does happen sometimes.”
Source: homelight.com ~ By Max Efrein, Contributing Author & Caroline Feeney, Executive Editor ~ Image: Canva Pro