Confirm or correct my acquired notion that RE appraisals do not much consider the everyday state of the house? That is, that the appraisal will come in about the same whether the place is in ordinary condition, with some normal wear and tear and elbow rubbing, or polished up all spandy as if to show buyers? That it’s more about the fundamental condition than perfect condition of paint, carpet etc.?
You are correct. Biggest factor is square footage, number of bedrooms/bathrooms, and additional upgrades (flooring type, countertop surfaces, etc.) or lack of.
As far as appraisals for mortgages go, there is a condition rating, from C1(brand new house) to C6(close to failing apart). Most lived in houses are going to get C3 or C4. Cleanliness won’t necessarily change anything, but if you have peeling paint, holes in the carpet, etc. it might bump you from a C3 to a C4, which would affect the value.
https://www.fanniemae.com/content/guide/selling/b4/1.3/06.html
Thanks. The STBX has demanded an immediate appraisal, thinking that normal wear and tear will reduce the value in her favor. It’s a slighly upscale colonial and in very good condition in every important respect, but the carpets are stained throughout (kids and dogs), the hardwood expanse downstairs is original (cheap) builder’s finish and shows wear and there is some unfinished painting in the master bedroom. No damage, holes, broken doors etc.
ETA: There is some unfinished repair work in the shared bathroom. (Kids did not tell me for months that the shower head back-sprayed on the walls, had to scrape out bad surface and do a rough fill, still has plastic tacked over it but it’s entirely cosmetic damage at this point.)
I will be fixing some minor things this week - a sticky door, a door molding the Dane puppy thought was tasty, etc.
Any further thoughts and ways to assure a fair appraisal - or, let’s be honest, a higher one - appreciated. Experiences with getting a fair/higher appraisal for division purposes solicited. (She’s buying out my half.) (No mortgage involved, now or for buyout.)
Much of what you describe is more oriented toward a home inspection, rather than a value appraisal.
Appraisal is on the lot/structure/fixtures/basic bones, while inspection is on the details like drippy faucets and sticky doors? That matches my buying and selling experience.
An appraisal is nominally supposed to me an assessment of what the house would be sold for on the open market. Downgrading the house’s value to account for things like wear and tear is appropriate and to be expected, because in fact that WILL reduce its sale value. This is as distinct from the place being, say, in need of a good dusting/vacuuming, which the assessor will assume will happen.
Theoeretically, something like crappy carpet should reduce the assessment value by more than the cost of replacing it, since in practice that’s how houses sell. However, investing $3K in the hopes of increasing the house value by $5K is risky, because you MIGHT raise the assessment by $5K, but you might not (and if you are splitting the money with your ex, the increase may not be worth it to you personally.)
So I guess what I’m getting around to saying is that if you can do something for no or very little money to make the place look nicer, it’s worth your time and effort; even a tiny increase in the assessed value is worth some elbow grease. But a significant investment of money in near-certain to not be worth it.
Okay. The house is generally clean and tidy but probably would not sell without fresh paint in the 2/3 that hasn’t been painted since new, new carpets throughout and a refinish of the hardwood area. None are terrible, but they’re definitely showing a lived-in look. I’m fixing a few more obvious things like the door molding, a broken porch rail etc. but those are few and far between - more “ah, dammit, it’s snowing again” delays than accumulated disrepair.
Just one more thing to worry about, but I’d expect even a minimum appraisal with nearby comps to be… adequate. The question is whether the 20% rise on Zillow is realistic.
Well, in my experience an “official” appraisal serves one and only one purpose - to justify the sales price for a mortgage lender to write the mortgage. That has more to do with market value, looking at similar nearby properties recently sold or on the market. As others have stated, general condition is a factor, but that can be used to narrow down the comparables to the same general condition.
Whereas your concern is slightly different - can I get someone to buy it, for the price I’m asking, and fairly quickly. In that case the cosmetic stuff can matter. Some buyers are swayed by shiny and new. Others are able to say to themselves, “Gee, it’s a shame they spent the money on new carpet and paint. I’m just going to paint and carpet it how I want anyway.” You can’t really control for that with the buyers who come through the door. A smart realtor can help you make the choice. As well as the choice on pricing for the market and condition.
Mine too. Official appraisals are bullshit.
When we bought our house, the official appraisal came in like 10% below our offer, and we tried to scramble to change our financing, or come up with a higher down payment, or whatever. Our agent disputed it, providing “alternate” comps, and a few weeks later, the appraiser “revised” her appraisal, and what do you know, it came in at exactly our offer. To the penny! What are the odds!
Had fancy equations and everything to prove how correct it was, too.
For what it’s worth, I don’t think we overpaid for our house, but whatever we paid the appraiser (via our mortgagor) wasn’t worth the rubber stamp she supplied.
Agreed. I don’t mean to disrespect anyone’s profession, but the entire industry is bullshit. I was amazed the first time I bought a home and got an appraisal. If the roof is leaking and needs replaced, the a/c and furnace are broken and need replacing, the water main is cut off and tapped so that there is no running water in the house, infested with termites, etc. in my lay mind, those items substantially and very materially affect the value of the home. Yet the professional appraisers do not even consider them, even if we are talking tens of thousands of dollars of difference.
I understand that they are not contractors and cannot verify every little nit-picky thing, but one simply cannot get an accurate value of a home without considering major factors.
It would be like me giving you the value of a car without considering the fact that the engine is missing and the steering wheel was sold for parts. Those are things which certainly are relevant to the value of the car for any buyer, yet my report acts as if they are not relevant.
You can hire multiple appraisers and take an average.
My appraiser asked me how much the contract price was and the appraisal came in at exactly that number.
I’ve had two different appraisers make mistakes in calculating the square footage. The place is a 1 bedroom apartment and the layout is simple. Half of the apartment is an open living area. The front of the other half is the bedroom, the last quadrant is kitchen bath and hall.
But they measured the living area front to back and tried to used that to calculate the square footage.
But the apartment is not square. There is a balcony off of the living area that is inset into the front facade. The front wall of the bedroom does not line up with the front wall of the living area, its about 2 feet deeper. When appraisers make this error it cheats me out of 24 square feet. In an NYC apartment that’s sort of a big deal