Before my husband became a real estate appraiser, I have to admit I didn’t really understand what they did — or why they were so important. Now I know that they actually have a ton of responsibility in the industry.
Appraisers help you refinance, buy, and sell properties by estimating their value, as well as determining and analyzing the factors that have the largest effect on the value. I’ve learned a lot of surprising facts about the process through the years, and asked my husband’s boss to weigh in on what you need to know so you’re in the loop, too.
Your online home estimate might not be too far off.
Over the years, those value estimates you see on real estate sites have become way more reliable (although nothing beats a personalized appraisal). According to residential appraiser Phil Donaldson of Accelerated Appraisal in Austin, this is because “they actually have boots-on-the-ground knowledge of properties now.” Basically, home mortgage companies take all the information appraisers send them about each place they assess, including value and comps, and harvest it to create the ultimate database.
The things you can’t change matter most.
You can renovate as much as you want, but the age and location (and, in some cases, the size) of your home will always stay the same. While real estate agents focus primarily on the cosmetics of a home, Donaldson says those are the things appraisers have to pay the most attention to when evaluating your home’s value — because they’re foundational to the property.
Not all square footage is equal.
The home down the road may have sold for $500 per square foot, but that doesn’t mean yours will. Remember that the price per square foot is really just whatever a property sells for divided by the square footage. As such, the number can change drastically depending on a multitude of valuable factors, including the view, whether or not there’s a pool, etc. This might not be as much of an issue if you’re in a high-rise condo, but it’s not uncommon to see some variance within a neighborhood.
Your multi-story home could be a problem.
“You’ll never be penalized for a single story as far as value goes, but sometimes you will be for a multiple-level home,” Donaldson explains. This is because markets have different demographics. Buyers in an aging community don’t have the same incentive to spend more on multiple levels that those in a neighborhood of young families do, because eventually they might not be able to use the stairs.
Solar panels can be a bad investment.
Going green is good for the environment, but it might not be for your wallet. Your rate of return on solar panels is typically somewhere between 10 and 15 years, and unless you pay it off, there will be a note tied to the title that the buyer has to pay upfront. “A lot of people don’t know this, and a lot of Realtors and title companies don’t do a great job of discussing this before closing,” says Donaldson. “Your home could end up being difficult to sell as a result.”
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If there is a home that you would like more information about, if you are considering selling a property, or if you have questions about the housing market in your neighborhood, please reach out. We’re here to help.
