These days, historically low interest rates have probably made you think about refinancing your home. If you’re planning on doing this, your lender will need to conduct an appraisal on your property. The goal of an appraisal is to perform an accurate valuation of your home based on a set of factors. Unfortunately, many of these factors aren’t under your control, such as comparable sales or proximity to schools or hospitals. However, Data Facts’ team of skilled appraisers has valued countless properties over the years, and we’ve learned there’s lots of things under your control when it comes to appraisals. Here are some examples of mistakes you should avoid that can diminish your home’s appraised value:
Obscure Interior Styles
Be careful with obscure colors and trends in your home. Think about it- more buyers are attracted to kitchens and bathrooms with neutral colors. If you’re going to add some pizzazz to your home, consider brightening it up with some accessories rather than adding permanent modifications. Lavish lighting, textured walls and ceilings, and “quirky” colors can all have a detrimental effect on your home appraisal.
Consider your home’s target market before making interior renovations. Let’s say you have a 960 square foot, 3 bedroom ranch that is considered more of a “starter” home. You then decide to outfit it with a high-end $50,000 gourmet kitchen, only to realize the kitchen only adds $20,000 worth of value to the home. The reason for this could be that high-end kitchens are not expected, nor accepted, in entry level homes.
Poor Functional Utility
Sometimes, poorly planned layout decisions can decrease your home’s value. For instance, a pass-through bedroom might be less than ideal for a prospective buyer. If you need to walk through one bedroom to get to another, chances are you’d consider this an impediment to the home’s value.
Another example of an action that can hurt your home’s appraisal value is combining bedrooms. Converting a 3-bedroom home to a 2-bedroom home can have a significant negative impact on your home’s appraisal. In most markets, there is more demand for 3-bedroom homes, and they sell for more than similarly-sized 2-bedroom homes.
Keep Your Appraisers and Borrowers Safe
With social distancing guidelines at top of mind, it’s important to keep your borrowers safe, while obtaining the appraisal data you need. Data Facts’ Verisite Photo Report enables lenders to obtain interior photos directly from the borrower, without the need for an appraiser on-site. Learn more about the Data Facts Verisite Photo Report here.