How to Get a Higher Home Appraisal Value
Lenders use your home's appraisal value to determine your eligibility for home refinancing or a home equity loan. An appraisal is an analysis ordered by your mortgage company that assesses your home's market value based on criteria such as your home's structural condition and the community environment. The Federal Reserve Board's consumer guide on mortgage refinancing says, if the amount requested for home refinancing far exceeds the appraisal value, lenders usually deny your request, or offer a loan with less than desirable terms. However, there are a few steps you can take to increase the appraisal value of your home to obtain refinancing, or get top dollar during re-sale.
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Remodel your home to increase its market value. Spend money renovating areas such as the kitchen, bathrooms or extra space in the basement or attic. According to BankRate, these are high-population areas in a home and renovating them earns the largest return on investment. Add cost-effective contemporary amenities such as stainless steel and energy-efficient appliances, or hardwood floors, to give your home's appraisal an extra boost.
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Remove clutter from your home's exterior and replace eyesores with features that give your home pizzazz. John Aust, president of the National Association of Real Estate Appraisers, says curb appeal can add between five to 10 percent to your home's appraisal value. Focus only on exterior renovations that are visible, but also aim to replace features that combine aesthetics and functionality. For example, place a higher priority on improvements such as adding a new roof or repairing a cracked foundation, because both projects are visible and they factor into your home's safety and functionality.
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Organize a neighborhood crime watch, or neighborhood clean up, to raise the value of surrounding homes in your area. No matter how much you invest in your home's upkeep, factors such as the condition of your neighbor's home, the condition of the roads, crime rates and school performance in your neighborhood all affect your home's appraisal value, according to the National Association of Realtors. Appraisers look at these factors to determine the desirability of an area. By reducing crime via a neighborhood watch, or increasing the curb appeal of homes on your street, you could increase your neighborhood's desirability and in turn increase the appraisal value of neighborhood homes besides your own.
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Consider seeking the advice of a licensed appraiser or real estate agent with experience in your area to avoid renovations that won't recoup your investment. For example, investing in personal projects like swimming pools or a backyard mini-golf course will do little for your home's appraisal value if your residence is the only home in the neighborhood with these amenities. Conversely, the lack of a swimming pool may detract from your home's appraisal value if you live in a neighborhood where pools are standard.
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References
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