An appraisal is something that tells you the value of your home, and there are many factors that affect the amount the appraiser comes up with. Here are three major factors that play a role in a home's value, and by knowing this you may be able to find ways to increase the value of your home on your next appraisal.
The Current Market
The current real estate market plays a huge role in determining your home's value. If you are planning on selling your home, it might be wise to wait until the real estate market is in good condition. If you wait until the demand for houses rises, your home value will be higher.
When homes are in demand, people are able to get more for their houses, and this occurs when there is a shortage of homes for sale.
One of the main tools used during an appraisal is comps. Comp stands for a "comparable," and refers to a house that is similar to yours. Appraisers search through house sale records to find homes that recently sold. They compare the prices of these houses to your house, and this is one of the ways they determine an appraisal amount.
Updates and Remodeling
While you might not recoup the full value of an update you make in your house, you are likely to recoup a majority of the money you spent. According to SFGate, if you renovate your kitchen, you can usually recoup 80% to 100% of the money spent on the project.
In other words, if you spend $30,000 on the new kitchen, your house might be worth $24,000 to $30,000 more than it was before the project.
Green Home Features
Although green homes make up a small percentage of total homes in this country, they may yield higher appraisals compared to regular homes. According to the Chicago Tribune, a recent study showed that green homes sold for around 9% more than regular homes in California.
If you want a higher appraisal value, add some green features to your house. Here are some of the options you can choose from:
- Solar energy panels
- Eco-friendly roof
- Energy-efficient windows and furnace
- Rainwater collection system
Adding these features can be expensive, but they may also add value to your home. If your home has any of these features, make sure the appraiser knows this as he or she is performing the appraisal of your home.
If you are having trouble selling your home, you may want to consider making some updates to it. These updates may not only help increase the value of the home, but they may also make the home more marketable. For more information, visit Appraisal Solutions Inc.