Avoid These Mistakes
Here are Six of the most common areas where you can let your judgment slip.
- Outside – Curb appeal is one of the best ways you can boost the value of your home. If you have an unkempt yard with overgrown shrubbery, dry patches, and damage to exterior paint, you could lose up to 3 percent on the value of your home.
- Basic Systems – Adding on new structural features is probably not going to increase the value of your home. That said, a roof with leaks, discoloration, or in disrepair, should be replaced. A roof in full functioning order is more likely to help during a sale than a roof in disrepair.
- Basement – A recently finished basement with a bathroom can add about 2 percent to the value of your home. While basement space doesn’t count as much as first and second-floor space, a finished basement is a great addition to a home.
- Market – If some nearby homes are in escrow with a higher than normal asking price, it may be tempting to bump up your home’s value under the pretense that the local market is “hot.” Homes in escrow, however, are not considered during the appraisal process, as appraisers can only use sales of sold properties to determine value. It might be possible that these homes in escrow have agreed on a lower price not yet disclosed to the public. It may be worthwhile to wait until escrow closes, before you have your own home appraised.
- Remodel – You may have spent thousands on remodeling your built-in entertainment center, but that doesn’t necessarily add any value to your home. In the appraiser’s eye, remodeling that is not in keeping with house’s age—particularly renovations that are too trendy—can negatively affect your home’s value. Improvements that are timeless, like adding wooden cabinets or updating bathrooms, to name just a few, can add value to your home.
- Real Estate Websites – While using websites like Realtor.com, Zillow.com and Trulia.com are helpful tools in finding information about your property and the values in your area, they aren’t always accurate. Most of them collect data from other sources such as tax records and Multiple Listing Services from your local Realtors’ Association. They don’t take into consideration the upgrades (or possible damage on the other hand) the property has, or the location it’s in, and more importantly, the pride of ownership, that only a human can sense. These websites are a good for reference, but an appraiser or real estate agent will be more accurate.
Comparable Sales Method
Comparable Sales is the most reliably accurate method for determining the value of a home. Comparable Sales are recent sales of nearby and similar homes. While it’s not an exact science, the Comparable Sales method is more of an educated guess. To determine the market value of a house, look around your neighborhood, or in similar neighborhoods, for homes that are similar in age and size. The sales records of those homes are the ones most likely to reflect on the possible sale of your own home.
Contact your Realtor
Before jumping head first into an appraisal, contact your Realtor. Realtors show properties to potential buyers on a consistant basis. They’ve most likely seen all your comparable properties. In some cases, more than an appraiser has. A Realtor will have a fairly accurate estimate on your property’s value.
Put on your buyer’s hat
It’s always a challenge to observe your home with a disinterested eye. Especially if you’ve lived in your home for quite some time. Try to remember what it was like to purchase your home. You wanted the best deal. Value can be described as the most a buyer is willing to pay.