What Adds Value To A Home: Inside The Appraisal Process
Candy Watts, a Realtor® with the Eric Stewart Group, is also a certified residential appraiser. Over the past 12 years, she has completed more than 9,000 appraisals throughout the Washington, DC metro area. On a recent segment of Eric’s radio show, Candy provided insight into the appraisal process, including what does and does not add value to a home.
Below is an excerpt from their discussion:
Eric: We started a good conversation about not being afraid of the appraiser. Tell me what you meant by that.
Candy: Well, many times as an appraiser, when I'm calling people to set up an appointment to come and see their house, they're like, "Well, you can't come this week, you have to come next week. I have to clean my house this week." Cleaning your house is not necessary. I'm looking at the house. Anybody who is in appraisals for any amount of time, your eye just looks at the house. You're not looking to see if there's dust sitting on the table, you don't care.
Eric: The dishes may not be done, there may be clothes on the floor, you may be embarrassed, but that's a different issue, right? But being afraid...
Candy: Exactly. As the appraiser, we will come in and the typical lender requirement is to take a picture of every room in the house. It's always important to make sure there are no locked rooms. I have that problem sometimes, bedrooms are locked.
I'll go through and typically draw a floor plan of the house, take notes, take measurements from the outside, and if a survey is available, a survey is always welcomed and very helpful for the appraiser, and outside pictures.
Eric: Okay, so don't be afraid of the appraiser coming in, facilitate the appraiser coming in. He's not buying, she's not buying, they're just looking at the sticks and the bricks, right?
Candy: Exactly…the appraiser has to give support to the lender that the value is there. You can help the appraiser by giving them a list of all the improvements you've done for the house. Of course the major improvements - kitchens, baths, flooring, windows, roof, heating, cooling, those are all big ones - any fences you've put in that were new. If you're in more of a rural property, it's important to understand about any updates to the septic system, to the well, anything with barns, run-in sheds, things like that are very important.
Those things add value to your property. What I always suggest to people, even on the real estate side, is when you first buy a house, you should keep a file of every home improvement that you do. You should also be keeping this file for tax purposes.
Eric: That’s right.
Candy: Even the minor little things, when you get ready to sell your house, those are things that you want to be able to point out to potential buyers, that these things have all been updated and replaced. You are showing to the buyer that you are really taking care of your house, you're updating it, you've got pride in your house. If you've got pride in your house, and you're maintaining it, the buyer feels more comfortable with also possibly buying it.
Eric: So, Candy, you show up for an appraisal, the agent's actually there and provides you with their chosen comparables, how does that help them, and how does that help you?
Candy: In the appraisal process, if I'm looking 2 blocks away in one direction, and I'm seeing that a similar house is selling for less because it is in a different school district, I then have a reason to support to the lender why I'm not going to go pull houses 2 blocks that way, but I might be going a mile and a half in a different direction to stay in that specific school district. If I have justification and reason that I can support and statistically show to the lender, I'm fine as the appraiser, I've done my job.
Eric: We have appraisers, though, who don't seem to be aware of those invisible lines, then we have to, as Realtors, educate them on, "Hey, no, you've pulled from this district. In our opinion, it's worth $25,000 more to be over here.” If you pull houses in a particular area, they tend to sell for more because of the school district.
Eric: Is there one thing that homeowners do to their houses, that they think really adds value, that really doesn't?
Candy: Window treatments. I go into many people's houses, they've spent thousands of dollars putting up these drapes, and having them custom made and everything, and for their tastes and for their furniture, it was perfect, but for the next owner, probably not.
If you're going to put lots of money into a window treatment, my personal observation is that plantation shutters, very generic blinds, but high quality, will bring you the most money back on that investment.
To listen to Eric and Candy’s full interview, click here.
Want to Know What Your Home is Worth?
If you are planning on selling your home in the next month, or even the next year, and want to know how much your home may be worth, contact the Eric Stewart Group for a FREE home valuation at no obligation. It’s never too early to start the planning process and getting professional input on your home’s market value.
For more information on buying and selling and everything in between, listen to The Eric Stewart Show every Sunday from 7am – 8am on WMAL AM 630 or 105.9 FM. If you miss a show, don’t fret! You can access the archived shows here.
About Eric Stewart
Eric Stewart started his real estate career in 1987, and each year sells over a hundred homes in Washington, DC, Maryland, and Virginia. He has completed more than 2,900 real estate transactions, placing him in the top 1% of Realtors® in the nation. With a comprehensive approach to marketing and a knack for negotiation, Eric has established his group as a force to be reckoned with in the world of real estate.