What Determines Real Estate Appraisal Value?
Given the cost of houses, your home probably represents a substantial portion of your total assets. Because of this, you need to think of your house as an investment as well as a home. Find out the value of your investment by having an appraiser come. You can use the information he provides for insurance purposes, to challenge your tax bill or in preparation for listing your home on the real estate market.
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Location
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The location of a house is the most important factor determining its value. Any other aspect of the house can be changed with sufficient money and motivation, but it's highly unlikely that it will ever change its location. Houses in quiet, low-crime neighborhoods with easy access to schools, shopping districts and public transportation are valued more. On the other hand, houses that are located close to landfills, next to busy highways or near abandoned houses will be assessed at a lower rate, according to Lisa Scherzer in the Wall Street Journal. The smallest house in a nice neighborhood often benefits from its neighbors and is worth more than it would be in another neighborhood.
Size
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Assessors determine the size of a house either by its square footage or by the number of bedrooms, and base the assessment partly on house size. As a rule, the bigger a house is, the more it is worth. The size of the lot that the house sits on also influences its value, particularly if the lot is landscaped and private. Putting an addition onto your house before selling it can increase its assessment, but you may spend more on the addition than you gain on the house value. Research the cost of an addition by consulting a contractor before undertaking such a project so you don't end up losing money.
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Condition
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When an assessor tours a house, she will mentally subtract dollars every time she sees a feature that needs repair or replacement. Although not as significant as location or size, condition has a definite impact on a house's appraised value. Dingy walls and tattered linoleum flooring make a house look bad, but aren't particularly difficult or expensive to fix. A cracked foundation or sagging roof is much more serious, and will have a substantial impact on the house's value.
Updating
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Styles change over the decades and people's tastes change along with them. The orange shag rug and flowered wallpaper that were so hip in 1974 are probably not helping your home's value today. Appraisers will take the age of fixtures and decor into account when determining your home's value. Particularly in the kitchen and bathroom, updating the style of wall color, flooring and appliances can make a big difference in that value. Replacing an entire kitchen is an expensive proposition, but other options, such as painting or refacing cabinet doors and drawers, can achieve a similar effect.
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References
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