Ask Your Appraiser

January 14th, 2020 1:30 PM


5 Reason Why an Appraisal Came in Low


Having an appraisal come in low can be upsetting to both the buyer and seller. Considering the impact a low appraisal can have on the home buying and selling process, it's important to educate yourself on what factors typically lead to a low appraisal. 

1. The house is a disaster

Appraisers are human. In addition to taking objective measurements in your home such as how many bedrooms and bathrooms, they also have to look at subjective measurements as well. An appraiser will look at the interior and exterior condition of your property—if there are dirty dishes in the sink, clothes hanging around, or a permeating stench of cat urine, this will affect an appraiser's judgement. Ideally, your home should be pristine on the day the appraiser arrives from the doorstep.

2. Basements are calculated differently

Your home may have an incredibly finished basement, but the appraiser will still have to calculate the value of the basement differently than the square footage above ground. This is, in fact, one of the more common reasons why an appraisal comes in low. Valuing a basement can often be far more subjective, especially when there are extravagant features such as a home theater, custom bar, or a personal gym. While a nice finished basement can substantially upgrade the square footage and features of a home, the value of the basement space will still only be worth a fraction of what similar space upstairs would be. 

3. Improvements are not always as valuable as you'd expect. 

Home improvements and additions must be of similar value to other homes in the area to be valued as you would expect. No matter how nice, the appraiser will not value the improvements significantly higher than the same improvements in the other homes in the area. One of the biggest misconceptions among homeowners is that there is a 1:1 return on home improvements. That is almost never the case. More often than not it takes years to get full cost or more from making improvements. 

4. The market is moving too quickly

Oftentimes, a reason appraisals come in low is because of the real estate market getting too ahead of itself. If homes are selling rapidly and at increasing prices in your area, this will likely lead to bidding wars where the final price ends up tens of thousands of dollars over the asking price. These bidding wars can cause major dilemmas for an appraiser.

5. The buyer had no guidance on what to offer.

Every day there are thousands of properties that have price reductions, and it only means one thing: the home was not priced appropriately. The seller was overzealous, or perhaps the agent promised the moon in hopes to make a sale. In states where dual agency exists, a buyer will occasionally go directly to the listing agent. They don’t have a buyer’s agent in their corner guiding them, and they end up significantly overpaying for the property. When purchasing a home, it always makes sense to have a buyer’s agent representing your best interests. Don’t be conned by dual agency. 

 

Appraisals By Michael is a leading full-service appraisal firm with extensive knowledge of the real estate valuation process. We specialize in numerous types of appraisal services, including property (commercial and residential), bankruptcy, divorce, immigration, relocation, and estate matters throughout metro Atlanta's $477 billion real estate market. With 20 years of experience in the real estate market, our appraisers work to provide excellent valuation and consulting services to homeowners, financial institutions, law firms, and accounting firms. Our state-of-the-art appraisal methods allow us to provide customized, detailed reports within 1 to 2 business days, helping to simplify your appraisal experience with accuracy and expertise.

For a full list of services, please visit our Services page. For a list of our coverage areas, please visit our Coverage Area page.

Interested in writing a guest article to appear on our blog? Contact us for details.


Posted by Anne-Marie Boring on January 14th, 2020 1:30 PMLeave a Comment

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January 9th, 2020 2:19 PM


5 Common Appraisal Myths


The home appraisal can be a nerve-wracking process for many sellers. While most appraisals don't ruin a sale (fortunately!), there are still some persistent myths that far too many sellers believe. Remember: the more you know, the less likely it is that you'll be surprised!

1. The appraiser can tell you what a buyer should pay

An appraisal is only one piece of the puzzle in the art of pricing homes for sale. The appraiser will give an educated opinion on the value of the home based on training and experience, and — if you appraiser is good at what they do — the price will usually be close to the market value, but not always. 

So it can be pretty frustrating to find out that the bank won't loan the buyer more money than what the home appraises for. If the home is appraised lower than the offer, either you or the buyer will have to come up with the difference if you want to sell at that price. Many times there is a compromise to be found. The seller comes down on their price a bit, and the buyer puts more money down to make up the difference.

2. An appraisal and home inspection are the same

Wrong — they are very different! As stated in our last blog post, a home inspection is intended to identify issues with the home that everyone should be aware of before money is exchanged, while an appraisal aims to determine the market value of the home. While an appraiser may flag problems that they notice during the appraisal, it is in everyone's best interest to hire an inspector in addition to the appraisal.

3. The more money you invest in a home, the more it will appraise for

This is perhaps one of the biggest myths in real estate. In fact, some improvements may actually bring down a home's value! Many sellers are upset when they discover that they do not get equal value for the improvements they've made to the home.

Overall, the market value of your home is based on what people are willing to pay for it. Take a remodeled garage, for instance. You may have turned it into an HGTV-worthy entertainment room, but the reality is that most people are satisfied with entertaining in their living rooms and would much rather have a garage to park their cars in. 

If you are thinking about selling in the next few years, avoid making any upgrades without talking to an experienced appraiser.

4. The assessed value, the appraised value, and the fair market value are the same

There are many confusing real estate terms that seem to be used interchangeably when they shouldn't be, but perhaps none more so than assessed, appraised, and fair market values. Here are their definitions to avoid future confusion:

  • Assessed value: The assessed value is simply what the local tax assessor believes your property is worth. While a majority of people think there is a correlation to the market value, there isn't! Assessed home values are essentially a yardstick for a city or town to collect a sufficient amount of taxes to cover operational expenses.
  • Appraised value: The appraised value is the opinion of a qualified appraiser. (That's us!) This value is often sought either during the purchase and sale of a property or during a refinance by an existing owner. Lenders use appraised value as a basis for giving borrowers a loan on a specific property.
  • Fair market value: The fair market value of a home is the most competitive price a buyer is willing to pay and the lowest price a seller would be prepared to accept. Think of this value as the meeting of the minds of a buyer and seller. Ideally, an appraised value and market value should be similar.

5. A better home guarantees a better price

This is often the hardest pill for most homeowners to swallow. You may have the biggest, most beautiful home in your area, but that does not guarantee that the appraisal price will reflect how exceptional your home is. In fact, standing out too much can even do more harm than good.

Homes are priced based on their area. More specifically, homes are priced based on their neighborhood. The appraiser will consider the size and amenities of other homes in your neighborhood to determine the price of your home. If everyone else has 2,000 square feet of space and laminate countertops, but you have 4,000 square feet and granite countertops, yours will likely be priced somewhat higher, but not nearly enough to get your money back if you have over-improved.

As always, talk to an experienced appraiser before making any major changes to your home. When it comes time to sell, you'll be glad you did.

 

Appraisals By Michael is a leading full-service appraisal firm with extensive knowledge of the real estate valuation process. We specialize in numerous types of appraisal services, including property (commercial and residential), bankruptcy, divorce, immigration, relocation, and estate matters throughout metro Atlanta's $477 billion real estate market. With 20 years of experience in the real estate market, our appraisers work to provide excellent valuation and consulting services to homeowners, financial institutions, law firms, and accounting firms. Our state-of-the-art appraisal methods allow us to provide customized, detailed reports within 1 to 2 business days, helping to simplify your appraisal experience with accuracy and expertise.

For a full list of services, please visit our Services page. For a list of our coverage areas, please visit our Coverage Area page.

Interested in writing a guest article to appear on our blog? Contact us for details.


Posted by Anne-Marie Boring on January 9th, 2020 2:19 PMLeave a Comment

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Are Home Inspections and Home Appraisals the Same Thing?

No, they are not!

Home inspections are an assessment of the property's structural integrity.  Appraisals are an assessment of property value of the estimated real estate home value based on what is seen. Appraisers give an unbiased evaluation at arms-length of the true overall cost of a property after all factors have been tabulated. Appraisers do not test the major appliances and their functions, therefore, appraisals are brief, not thorough. However, an appraiser does measure the dimensions of the property inside and out and give an accurately measured size for a more accurate representation of the true real estate property value.

Appraisals also do an assessment of the surrounding market statistics from comparables, location, the neighborhood area, proximity to amenities offered, and compare their findings with the overall health of the real estate market.

In most cases, appraisers will not recommend fixes during an assessment of property value, mainly because they do not test appliances for workability and function and do not focus on the structural integrity of the home. The main focus for the appraiser is to establish a value of the property, which a home inspector will not.
Home inspections are more thorough and cautious in inspecting appliances, safety issues, and possible damage or potential problems. This may include testing for radon gas emissions, water quality, asbestos problems in the roof, and lead in the paint used inside and out. They also test for other possible toxic materials used on the home’s building structure.

Home inspectors will give you reasons and causes for issues in the home operations, unlike an appraisal. They will often inspect every accessible area, even crawl through crawl spaces and attics to find any unperceived problems in the home such as water damage, termite damage, and mold and evaluate them for safety and maintenance needs.

Typically, home appraisals are for lenders while home inspections are for buyers.
Lenders rely on appraisers to ensure that loans are not given out unless the assessed value of the property at least equals the loan amount. It is imperative to get an appraisal for loans on a property because banks are required by law to issue loans only to appraised properties.

 

Appraisals By Michael is a leading full-service appraisal firm with extensive knowledge of the real estate valuation process. We specialize in numerous types of appraisal services, including property (commercial and residential), bankruptcy, divorce, immigration, relocation, and estate matters throughout metro Atlanta's $477 billion real estate market. With 20 years of experience in the real estate market, our appraisers work to provide excellent valuation and consulting services to homeowners, financial institutions, law firms, and accounting firms. Our state-of-the-art appraisal methods allow us to provide customized, detailed reports within 1 to 2 business days, helping to simplify your appraisal experience with accuracy and expertise.

For a full list of services, please visit our Services page. For a list of our coverage areas, please visit our Coverage Area page.

Interested in writing a guest article to appear on our blog? Contact us for details.


Posted by Anne-Marie Boring on January 6th, 2020 1:30 PMLeave a Comment

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December 30th, 2019 1:01 PM


10 Ways to Boost Your Home's Appraisal Value


When it comes time to sell or refinance your home, getting a high home appraisal cost is crucial. Fortunately, there are steps you can take to ensure your home's value hits maximum dollar.

1. Clear away clutter

Although clutter is inevitable with a busy family, it can also lead the appraiser to question if the homeowner is capable of maintaining the entire home. Some quick decluttering tips:

  • Box and store excess items in your home
  • Pay close attention to the kitchen and bathroom especially. If what's sitting on the counter is frequently used, put it away in a cupboard so that your counters are free of anything that isn't decorative.
  • If all else fails, or you don't have time to properly clean, shove your clutter into boxes and briefly store it in your car or storage unit. 

2. Clean the house

While this seems like an obvious step, many homeowners are understandably busy with jobs and family concerns and overlook the fact that a clean home is a desirable home. 

3. Make an investment

  • Paint the interior a neutral color. For the price of a few paint cans and elbow grease, you can add real, substantial value to a home.
  • Get rid of vinyl flooring. Replace it with ceramic tile, wood, or even laminate flooring.
  • Update your countertops. Laminate countertops should be replaced with ceramic tile or granite.

4. Reseed and patch the lawn

Investing $100 in grass seed to reseed, or at least patch bare spots, in your lawn can really pay off when it comes to appraising your home.

5. Patch sidewalks and driveways

Few things in life are certain, but if you see a small crack in your home's sidewalk or driveway, it will only get worse if left unattended. Ready-to-use sealant for patching cracks in concrete is sold in tubes (about $5 for a 10-ounce tube) and applied with a simple caulking gun, while asphalt repair products are even less expensive.

6. Upgrade your mailbox

Whether it's a roadside mailbox or one mounted by the door, the mailbox is one of the first things visitors to your home notice. Shop carefully and $100 could buy an attractive new mailbox and perhaps even a new post to mount it on. You could also just invest in some fresh paint for an easy and affordable spruce up. Plant a perennial, like ornamental grass or a climbing vine, near your rehabbed mailbox for added appeal. 

7. Power wash decks and patios 

Buying a quality power washer to pressure hose decks, patios and other outdoor surfaces is expensive. But for about $50, you can rent a power washer for a day from a home improvement store and scrub down everything that needs washing.

8. Paint your shutters 

  • Clean your shutters with soapy water. If you need a ladder, position it where appropriate. Scrub all surfaces that need painting; dirt and dust will prevent your paint from adhering properly.

  • Place old newspapers under each shutter and around your doors.

  • Use the painters tape to cover the house around the shutter to protect against accidents.

  • Get your buckets ready and put your vinyl gloves on. Pour primer into the first bucket.

  • Paint at the top of the shutter and work your way down. Make sure to get in between the slats. Use light pressure to eliminate brush strokes.

  • Once your primer dries, repeat the steps for your paint in the second bucket.

  • Some colors require two coats to achieve a richer shade. Be sure to let each coat dry before you start on the next coat.

9. Add solar landscaping lights

Solar landscape lights are a cheaper, greener, and easier alternative than having a complicated lighting system installed in your yard. Simply place the lights around your sidewalk, let them drink in the sunshine for power and enjoy your newly lit pathway at night.

10. Freshen up the front door 

Consider repainting the door in a contrasting color that really pops, polishing or replacing worn hardware and perhaps springing for a new set of house numbers.

As you decide what changes to make, keep an eye out for maintenance problems, such as torn window screens, dripping faucets, running toilets, missing trim and broken door handles. These should be fixed prior to the appraiser's arrival.


Appraisals By Michael is a leading full-service appraisal firm with extensive knowledge of the real estate valuation process. We specialize in numerous types of appraisal services, including property (commercial and residential), bankruptcy, divorce, immigration, relocation, and estate matters throughout metro Atlanta's $477 billion real estate market. With 20 years of experience in the real estate market, our appraisers work to provide excellent valuation and consulting services to homeowners, financial institutions, law firms, and accounting firms. Our state-of-the-art appraisal methods allow us to provide customized, detailed reports within 1 to 2 business days, helping to simplify your appraisal experience with accuracy and expertise.

For a full list of services, please visit our Services page. For a list of our coverage areas, please visit our Coverage Area page.

Interested in writing a guest article to appear on our blog? Contact us for details.


Posted in:Value Awareness and tagged: appraisalvalueDIY
Posted by Anne-Marie Boring on December 30th, 2019 1:01 PMLeave a Comment

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Ask the Appraiser: What Are Other Ways to Lower My Property Taxes?


In most areas, property tax is based on how much your property is worth in your area. However, don't expect your appraiser to automatically lower your property taxes. Having your property taxes lowered takes more than a downturn in the local housing market. You'll need to file an appeal to reduce the assessed value of your home.

What Are Some Little-Known Options for Lowering My Property Taxes?

  • If you have recently (within the last six months) purchased your house for less than the county's appraised value, this may help you lower your property taxes.
  • Are you missing any deductions? Are you disabled, a senior citizen, a veteran, or qualify as a low-income homeowner? Did you remember to take the homestead exemptions? Does your home qualify as a historic or energy-preserving home? Is your property agricultural? Ensure you include any deductions to lower your taxes.
  • Which units are taxing you? Your property tax notice will list each taxing unit. If you do not recognize a taxing unit, inquire about it with your assessor's office. Each unit has its own rate, and it's possible you are being taxed by an incorrect unit.
  • Pay close attention to rollbacks. If a taxing unit adopts a rate that exceeds the rollback rate, you may petition for an election to reduce the rate. Your local tax appraiser board will have information on how you can organize this.

Appraisals by Michael offers a number of appraisal services, but appraisals for property tax appeals is one of our specialties. We are here to provide you with the assurance that you are only paying your fair share of property taxes. While we are unable to guarantee the outcome of your appeal, an appraisal completed by one of our state-certified appraisers is your best chance of success. State-certified appraisers are largely considered to be the experts in real property valuation. We are familiar, experienced, and trained in the ins and outs of your neighborhood.

 


Posted by Anne-Marie Boring on July 8th, 2019 3:52 PMLeave a Comment

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