Steve and Lisa's Mortgage Morsels

Am I Helping or Hurting My Home?

August 31st, 2012 8:27 AM by Steve Iltis

 

Appraisers say the following five areas are where homeowners often miscalculate the actual worth of their property.

1. Home Exterior

The appraiser sees: Overgrown bushes and chipped paint.

What he does: Slices as much as 3% off the value of an average-size home.

Why: Curb appeal is primo. And an unkempt yard is a sign that there may be other issues.

"A good-looking lawn and bushes imply that you also take care of the internal systems in the house," says Jonathan Miller, president and CEO of a New York City-based appraisal firm that works throughout the tri-state area.

Moreover, the more meticulous your neighbors are about grooming, the more your appraiser will downgrade the value of your home.

"If a lot of the nearby properties are professionally maintained, the one that sticks out like a sore thumb will get a harder adjustment than in a subdivision where there's more variation," says San Diego appraiser Armando Ortiz.

2. Basic systems

The appraiser sees: A brand-new roof.

What he does: Nothing.

Why: Just as a knee replacement won't make you look 20 years younger, a new roof, furnace, or boiler isn't considered an improvement to your home.

That said, if your roof is in disrepair, replace it: Signs of leaks or discoloration can knock a significant amount off the home's value.

"When people buy a home, they expect the roof to be working," says Columbus appraiser Mike Armentrout. "So while a new one isn't an added feature, it will help your chances of a sale."

3. The Basement

The appraiser sees: A recently finished basement with a half bath.

What he does: Adds about 2% to the value of the home.

Why: Yes, your finished basement adds value -- but don't expect it to count like first-floor space.

The addition of a bedroom and quarter bath on the ground floor could increase your home's value by up to 20%, especially if you've got only one other bathroom.

"A below-ground basement normally isn't included in the square footage of the house," says Miller.

The same rule applies to outbuildings like a pool-house casita, painting shed, or studio.

4. The Market

The appraiser hears: Two nearby homes just went into contract above their asking prices.

What he does: Nothing.

Why: While a broker might pump up a home's asking price based on the sense that the market is "hot," by and large, appraisers are bound by the data of recent comparable sales



NEW YORK (Money magazine)- http://money.cnn.com/magazines/moneymag/

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Posted by Steve Iltis on August 31st, 2012 8:27 AM

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