An appraisal is often conducted before a sale so that you or the lender know the true value of the house. The decision to put your house up for sale is a pretty emotional one; after all, you have a lot of memories, and the house is precious to you – as are many of the features and upgrades you have added. But that’s not the way an appraiser is going to look at your home. They will have an unbiased, realistic view of what adds value to your home and what does not. Here we present 5 common appraisal myths some homeowners have:
- Appraisal and home inspection is same: It’s true that both these activities are conducted as safeguards for the buyer (and their lender), and both come and look around your home, there is a major difference: A home inspector will conduct a thorough inspection to try and determine if there are any potential problems lurking in your home; the appraiser on the other hand, tries to determine the true market value of your house. The appraiser will check the gross living area, condition, quality, improvements and maybe even the sales which you use to arrive at your listing price.
- The appraisal figure is what the buyer will or has to pay: Even an appraisal conducted by a qualified professional need not be exact; it is one opinion regarding the market value of your home. If the appraisal figure turns out to be lower than what the seller and buyer agreed on, the buyer may want to renegotiate; if they are going through a lender, the lender is probably not going to cough up more than the appraisal figure. The buyer can choose to go ahead with the sale and make up the difference through some other method, or the seller may agree to a lowered price, or find a buyer who has the finances ready and is not going through a lender. It all depends on how you negotiate.
- The appraisal figure depends only on the size: Not always! If the house is a huge one, on a small lot in a modest neighborhood, it might not be appraised for proportionally more than the neighboring homes. The gross living area is a major influencer of market value but the quality, condition, features & upgrades also pay a major part in determining market value.
- Fancy fixtures and appliances always lead to a higher appraisal value: Just because you spent a $100,000 extra in the top of the line fixtures or appliances, it doesn’t mean it will add a similar amount to the appraisal value. For example, an extravagant home theater in a house in a modest neighborhood may not count for much; if no other homes in that area have a home theater, it could be an indication to the appraiser that a typical buyer in that neighborhood is not really willing to pay for a home theater.
- All amenities have equal value: Umm, no way. If you convert your garage into a home gym, the appraiser may not give you brownie points. A garage is more of a necessity – to keep your vehicle safe – whereas a home gym is not exactly something everyone wants. Different amenities will likely be valued differently depending on the market segment.
Looking for a reliable and efficient home appraisal service in Arkansas? At Nabholz Appraisal, we have years of experience serving a wide range of clients. Simply call us at 501-327-6103 to discuss your needs.