Are you a Salt Lake City resident looking to sell your home? Now is the time due to pricing and inventory trends pointing in favor of sellers. Single family home sales in Salt Lake County rose over the past year, but prospective sellers must price homes carefully. Inventory is still low, which means that a house priced too high will stick out and sit stagnant while other homes fly off the market. How do you make sure that your house is priced just right? Get your home appraised before putting it on the market.
Home Appraisal Defined
A real estate appraisal is an evaluation performed by a licensed professional to determine the market value of a property. Factors appraisers consider include lot size, the general condition and size of the house, the neighborhood and local market trends. There is no set valuation formula, but appraisers usually use one of two common methods.
The most common appraisal methods are the cost approach and the sales comparison approach. The cost approach is typically used for new properties. It estimates how much it would cost to replace the home if it was destroyed. Appraisers look at the property’s land value and likely depreciation. The sales comparison approach bases its valuation on similar homes that have recently sold in the area. Appraisers look at three or four homes of similar size and with similar features.
One common appraisal myth is that property value is impacted by a house’s tidiness. Home appraisers do not mark down for dirty dishes or unfolded laundry. They focus on the condition of permanent structures, such as broken windows or torn carpet. Similarly, a home appraisal is not the equivalent of a home inspection. An appraisal determines property value. A home inspection looks closely at the condition of the house. Another myth is that home improvements always increase property value in proportion to their cost. Appraisers will look at that impressive new kitchen you installed, but it will only be one of many factors considered.
Recovering From a Low Appraisal
You have several options if you think your home appraisal is too low. Check the appraisal report for errors. The square footage of the house may be too small or the appraiser may have overlooked valuable features. Look for comparable homes in the neighborhood that have sold. In a rapidly changing market, the appraiser may miss the latest, high priced sale. Also, the appraiser may not be from your area. Educate the appraiser about local features such as stellar schools or popular parks. Finally, get a second appraisal. A new pair of eyes may see your property in a better light.
You can use your property appraisal to determine an appropriate, competitive price for your home. If you are displeased with the appraisal, you may want to investigate whether certain repairs or improvements would raise the value to more desirable levels. If your appraisal is satisfactory, get ready to prepare your home, price it wisely with the help of your agent and stock up on moving boxes!