A detached garage could add value to a home appraisal, but the method that the appraiser uses to assess the property affects a garage's valuation. Your local housing market also affects the value of a detached garage, especially if most homes in your neighborhood don't have garages.
Comparable Homes
One way an appraiser would place a value on your home is by comparing it with nearby homes that recently sold and are similar to your property. The appraiser would use the purchase prices for those homes to estimate the value of your property, while taking note of the features your home has that those homes lack. Therefore, an appraiser would add a certain amount to the value of a home if it has a detached garage and comparable homes don't, according to Bank Mutual of Wisconsin. However, it's difficult to predetermine how much a detached garage would increase your property's value, because no two appraisers would assign the same value to a detached garage in their estimates.
Replacement Costs
Appraisers also consider how much it would cost to replace a home and any other structures on the property to determine the property’s value. "Mortgage News Daily" indicates that an appraiser might use information from builders in your area to determine a structure's reproduction cost per square foot. The calculations would be done separately for the house, any type of garage, a patio and other structures. For example, "Mortgage News Daily" indicates that an appraiser may determine it would cost $25.50 per square foot to replace a 516-square-foot garage and place a total value on the garage of $13,158.
Age and Condition
The age and condition of a detached garage would affect how much value it adds to a home appraisal. Rebuilding a home with a detached garage at current prices might cost $200,000 or more in some areas. However, the home and garage would likely get a much lower appraisal if they're 20 years old and in bad condition. Bank Mutual indicates that the condition and age of a property takes precedence over the cost to rebuild its structures when an appraiser determines property values.
Appraisal Results
An appraiser may use comparable homes and estimated replacement costs to determine the value of a property, but both methods may not show on the appraisal documents, according to Bank mutual. You can ask an appraiser about the value he placed on a detached garage and how he arrived at that value. It's unlikely that an appraiser will change the value if you think it’s too low, unless you can show he miscalculated the garage’s square footage or that he made some other mistake that affects its value.
