So You Replaced the Light Bulbs? Great. Now Here’s What the Appraiser Really Wants to Know.

If you’re selling your home or refinancing your mortgage, taking advantage of these historically low-interest rates, chances are you’re looking to make the most of your upcoming appraisal.  And by that I mean, you’d like your home to appraise for as much as possible. Am I right? Well, one of the ways you can make the most of your next appraisal is by making sure the appraiser has as much information about recent improvements as possible.

It’s interesting to see the wide spectrum of beliefs about what matters when it comes to a home’s market value.  Some homeowners will just flippantly throw out, “Oh, we replaced the roof last year, but that really doesn’t matter, right?”, while other homeowners present us with a five-page list with dates and prices of every last penny they’ve spent from replacing the HVAC to the toilet paper.

So what does matter?  What information should a homeowner or a Realtor give to the appraiser?  Are there things that don’t matter? Here’s a few of each to consider.

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What matters?  Here are a few things to make sure you relay to the appraiser if they apply to your home.  The appraiser might not be able to say an exact dollar amount of difference each makes, but they will all likely be considered in the appraiser’s opinions formed during the appraisal process. 

1.  Additions –  When was the addition complete?  Who was the contractor? Was the addition permitted?  What was the total estimated cost of the addition? Think garages, sunrooms, master bed/bath additions, etc.
2. Major systems – When was the roof, windows, or HVAC replaced?  What about the plumbing or electrical system?
3. Minor components – remember when you replaced flooring or lights, the water heater, or interior doors.
4. Kitchen and baths – what level of updating or remodeling did you complete?  Was it just new flooring? Or was the kitchen gutted to the studs and completely remodeled?  When was this work completed? 

What doesn’t matter so much?  I know it’s your home.  Your baby. Your investment.  But like it or not, not everything you do to your home is going to make a difference when you go to sell.  Here are a few things that you don’t really need to tell the appraiser about.

1.  Cosmetic improvements, like paint.  Most people paint their home, and most paint right before moving in.  So it is likely the buyers of your home won’t care that you just painted the walls, because they really don’t like gray, and as soon as they get the keys, they’re gonna slap some color on those walls.  Most appraisers really won’t be considering new light switches, cabinet hardware, register covers, or closet shelving. Again – all things that have been told to us before!
2. Personal property.  You’d be surprised how many times we hear about the new blinds, or the super-fancy TV hanging on the wall.  Sure, that TV might’ve set you back a couple of grand, but it’s not gonna matter for your refinance appraisal. And, you’re probably packin’ that baby with you when you move, so…remember – if it’s not attached, the appraiser will likely not consider it (also think: above ground pools, and other non-permanent structures like storage buildings not on a permanent foundation).
3. What you’re planning on doing…next Summer.  Unless the appraisal is subject-to improvements/changes/updates, etc, the appraiser cannot factor in what may be done in the future.  Planning on replacing all the carpet with luxury vinyl in a few months? Maybe building a detached garage next Spring? That’s all fine and good.  But if the appraisal is as-is, then none of that will matter for the current appraisal.  

Just remember that the appraiser doesn’t live in your home (duh, right!).  She doesn’t know what all you’ve done to your home in the last 10 years. And, she’s not being nosy.  It’s all part of the job. The more we know about your home, the better opinion of the value we can develop. 

And, If you’re just not sure if the $5,000 you spent on landscaping matters, go ahead and tell the appraiser.  As a rule of thumb, I always want to know as much as possible. I can decide what matters and what really doesn’t.  So go ahead and write that five-page list if you’d like!

Helping homeowners navigate the appraisal process,

Ryan Bays, SRA, AI-RRS