If you are selling your home and getting it appraised either for your own knowledge or for the next buyer’s lender, there are things about a house that are easy to place a value on: bedroom and bath count, property size, distance to public transportation, and square footage. But there are also those property traits and features appraisers find it difficult to judge as well, so the more information you can provide to the appraiser of your home, the better.
The popular appraisal blog McKissock.com outlines a few of these, offering insight into the scope of the average appraiser’s work. “As an appraiser, you’re not always dealing with straightforward, cookie-cutter houses. Many properties have certain features that make your job a little (or a lot) harder than usual,” says the appraiser collective, who goes on to describe how they recently asked their appraisal community about which specific home features were among the most challenging to appraise.
Topping the list is solar panels and green technology and features. These are still fairly new in some markets, which means they require more attention to detail in order to place a value on them for the next buyer. Whereas huge glassy panels gathering light and energy may be a common sight in some parts of the country, where they are not, they are still an odd sight, making it difficult for appraisers to find enough data to determine the market reaction. And then there are replacement costs, with factors like owning or leasing playing a role. “It is difficult to find sales enough to perform a paired sales analysis. Also since these are relatively new features the long-term effect is unknown,” says one appraiser.
In places where green energy has become the rule and not the exception to it, however, homebuyers have come to expect many of these features, making homes with solar panels, tankless water heaters, and smart green technology more desirable as well as valuable, according to a study by BuildItGreen.org, who also did an appraiser driven study in California.
Call them what you want — guest houses, she-sheds, man-caves or playhouses, but accessory dwelling units are tough to appraise. There is such a large variety of ADUs, that judging their added value is a challenge. If you have more than one on your property, it’s double the trouble for appraisers to try to find comparable properties from which to base their calculations. “First off, ADUs are hard to find in my area, but they are getting more and more popular,” says one appraiser in the McKissock study. “Second, I feel like the added value is all over the board, especially in scenarios where it is a detached garage conversion or a basement. Also, then you have to address quality, condition, is it permitted, does zoning allow it, and so on and so forth. I have yet to find a similar ADU to what I am appraising at that moment.”
Then there are views. If the view from your home mortgage is unique and can’t be replicated elsewhere in your neighborhood, it can be a problem for an appraiser. While that view might seem priceless, that’s also a problem for appraisers, who must quantify the value of it. Other challenges include appraising finished basements and attics, extensive landscaping, home additions, and garage conversions as among the most difficult to appraise.
CNBC offered some helpful hints on how to make your appraisal go smoothly in its article Eight Ways You Can Improve Your Home Appraisal. They include making sure the appraiser knows your neighborhood by providing your own comparable property subjects, documenting improvements to the property, and making sure the property is clean and easy to appraise. No one can guarantee any of this will work, but it’s worth a shot.
Source: McKissock, BuildItGreen, CNBC, TBWS