11 Factors That Affect Your Home Appraisal

In this article:

The Factors That Affect Home Appraisals

  1. Curb appeal
  2. Home location
  3. Home size
  4. Deferred maintenance
  5. Structural strength
  6. Dated or undesirable finishes
  7. Overly personalized renovations
  8. Closets and storage
  9. Comparable homes
  10. Market conditions
  11. Appraiser experience

When it comes time to sell your home, there’s a long to-do list to prepare to put your home on the market. From cleaning up to fixing what’s broken, there’s a lot you can do to make your home more attractive to prospective buyers. But before your home hits the market, the first person you want to impress is the home appraiser.

A home appraiser will examine your home from top to bottom to decide how much your house is worth. It’s a crucial step of the home selling process because it helps set the asking price for your home, and helps the home buyer’s lender validate financing for the purchase. In most cases, a home appraisal is a one-and-done deal. Typically, only a buyer can request a second appraisal while only a lender can insist upon one.

Here, we’ve rounded up a list of common factors that may negatively affect your home appraisal and drive down your home’s value. While some factors may be beyond your control, many are not, and knowing how to think like a home appraiser will help you maximize your home’s appraisal.

What is a home appraisal?

A home appraisal is an unbiased, expert opinion of how much your home is worth. It’s completed by a professional home appraiser who is qualified and certified in your state.

The results of an appraisal will help you determine the asking price for your home and is used by lenders to determine how much loan value they will offer to a homebuyer.

For consistency, home appraisers use a “Uniform Residential Appraisal Report.” This standard report helps eliminate bias and verifies that all inspectors play by the same rules. A home appraisal looks at:

  • The year the home was built
  • How many stories the home has
  • Roof materials
  • Floor and wall materials
  • Bed/bath total
  • Square footage
  • Foundation
  • Basement and attic features
  • Off-street parking, driveway, garage, etc.
  • Appliances
  • Neighborhood
  • Housing market

Home appraisers use a “sales comparison” approach, which means they choose three comparable sales in the local market and outline how your house is similar or different from those properties. No two houses are exactly alike, so these comparisons help establish a more consistent baseline for evaluating properties in the same area. If you’re wondering what negatively affects home appraisal, keep on reading.

What factors impact a home appraisal?

1. Curb appeal

They say don’t judge a book by its cover but the axiom doesn’t follow for houses. Appraisers judge how your home looks from the street because that’s a factor potential buyers will consider. A very attractive home will attract more interest on the market, that’s just a fact.

If your home is a little run down, fix the shutters, paint the exterior, and make your house look as nice or better than the other homes in your neighborhood.

2. Home location

Every appraisal assesses location first. You can’t compare the value of a home in rural Georgia to one in Charlotte. But there’s more to it than that.

Appraisers will consider how close your home is to neighbors, how near it is to the street, neighborhood amenities, the proximity of schools, and the quality of roads. If you live within walking distance to a train station, that’s great. If you live right next to the tracks, that’s less great in an appraiser’s mind.

Likewise, proximity to poorly maintained, vacant homes, or foreclosures may also hurt your home appraisal. As major eyesores or potential settings for crime, vacants tend to pull down nearby property values. This is out of your control, of course, but something to keep in mind.

3. Deferred maintenance

One of the biggest factors that reduces a home’s appraised value is deferred maintenance. Maintaining a home is expensive and time-consuming but if you neglect that standard maintenance, it becomes a costly problem.

A roof leak that might have cost several hundred dollars to fix last year could expand to damage the ceiling and drywall, resulting in thousands of dollars of damage. When a home appraiser sees neglected maintenance that may get passed off to a new owner, it will bring down the appraisal value.

Before getting an appraisal, it’s a good idea to have a home inspector go through your house to point out maintenance you may have missed or broken items that need fixing.

4. Home size

Your home’s square footage contributes to your home’s appraised value. But not only do appraisers look at the number of square feet, they also examine how it’s distributed.

You may have been in some odd homes in your life and, chances are, some of those odd features negatively impacted an appraisal. For instance, homes built in the 1930s and ‘40s often connected multiple bedrooms without a hallway in-between, reducing privacy. Colonial homes may have strangely placed walls or tiny rooms that seem to serve no purpose to the modern homeowner. Quirkiness may not help an appraisal.

The number of bedrooms and bathrooms will also impact the appraisal. A one or two-bedroom home may not be desirable in a suburban neighborhood since many potential buyers consider the suburbs as a place to start a family. Too few bedrooms will alienate some buyers.

Before making renovations to add a bedroom, however, you should know that according to the International Residential Code (IRC) that appraisers adhere to, anything less than 70 square feet cannot count as a bedroom.

For bathrooms, an appraisal will compare the number of full and half baths in your home to the neighborhood. If all the homes around you have two full baths and you only have one, that will bring down the value of your home appraisal.

5. Structural strength

A well-built house is worth more than one that’s about to fall down. Makes sense, right? Home appraisers pay close attention to a home’s structure and construction, identifying the exact types of materials used to build the home. A home that’s been built or updated with modern materials will earn a higher appraisal than one that hasn’t been updated in 50 years.

Newer homes with newer foundation materials and techniques tend to be valued higher. Homes with updated, safe, and energy-efficient roofs and windows will also hold higher value.

6. Dated or undesirable finishes

Research shows that Americans spend about $400 billion every year remodeling their homes. Remodels can upgrade worn-out materials, finishes, and surfaces, or update a home to a modern style.

Many potential buyers appreciate the craftsmanship of older homes, but they’d still like to see that it’s well-preserved and updated. Appraisers note value for high-end kitchen appliances, high-quality countertops, or brand new faucets. Likewise, they may dock value for white appliances or odd finishes like pink polka dot countertops.

7. Overly personalized renovations

Speaking of odd finishes, Americans are independent, opinionated creatures with their own unique tastes. Your taste may not be everybody else’s taste.

Sure, many people love The Beatles, but not everyone would paint a mural of John, Paul, George, and Ringo on the wall of their finished basement. Many people enjoy a nautical theme, but not everyone would turn all of their home’s sinks into different kinds of sea shells. 

If you’re making renovations in a home you someday plan to sell, keep them simple. Not only will overly personalized renovations negatively impact your home appraisal, but complicated projects may take a long time to finish, and half-done projects will hurt the final value when your home hits the market.

8. Closets and storage

In our materialistic times, we just have more stuff than people did in the ‘60s and ‘70s when many homes were built. Closets in homes built 50 or more years ago tend to be smaller and these homes just have less storage. If home appraisers notice clutter, they’ll deduce that your home doesn’t have enough closet or storage space.

Storage is important to many buyers. A large walk-in closet, a re-finished and spacious garage, a finished basement, and well-placed closets throughout a home all positively impact a home appraisal. On the other hand, a lack of clear storage space negatively impacts it.

9. Comparable properties

Home appraisers use the neighborhood as a baseline. If they’re appraising a two-story home, they’ll use the appraisal of a nearby, similarly sized two-story home as a standard from which to work. (As if the neighborhood rivalry wasn’t heated enough.)

If your neighbor’s house is almost identical to yours, except that it was painted more recently and they updated the siding last year, a home appraiser will see it as more valuable than your home.

Sometimes, an appraiser compares your property to an outlier, like a home that sold between relatives for a lower cost or sold at foreclosure. That can negatively impact your home appraisal.

10. Market conditions

A home appraiser doesn’t just consider your home’s value compared to similar properties or with historic sale data. They also analyze the market at large to forecast supply and demand. They’ll examine whether sale or leasing prices are increasing or decreasing in your area, whether foreclosures rates and vacancies are dropping or rising, and other similar factors. This analysis not only helps determine appropriate value, but aims to show future benefits of ownership to potential buyers.

If you’ve received any pre-market offers above asking price in your area, let your home appraiser know. It might just help your appraisal value.

11. Appraiser experience

The appraiser doesn’t work for the seller in most instances. Their client is your potential buyer’s lender, so you can’t choose who visits your home. Still, they’re intended as an impartial third party to best assess your home’s value.

Nonetheless, appraisers are human and, like all of us, get better with time and experience. Sometimes an appraiser works outside a regular coverage area and isn't as familiar with the market. When an appraiser has less experience, he or she may be unnecessarily harsh. If you’re unhappy with an appraiser or feel they didn’t understand your market, you can request a copy of the appraisal from the buyer and file a dispute with the lender.

What factors won’t impact a home appraisal?

There are a number of factors that negatively affect home appraisal but if you’re concerned about a few specific items, rest assured there are a number of factor’s that won’t impact a home appraisal. These include:

  • Race of the seller and racial composition of the neighborhood: Home appraisers are forbidden from discriminating based on race.
  • House paint color: Paint is easy and relatively inexpensive to change; finishes are not.
  • Basements: Even finished basements should not be factored into the total living area.
  • Clutter or mess: Clutter is not supposed to impact a home appraisal, so don’t worry about the odd stray t-shirt on the floor. Keep in mind, however, that sifting through a very messy house may add time to the appraisal, raise additional questions, or make an appraiser look more closely for faults. 

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