Appraising a home is an imperfect art, but some appraisal methods have greater accuracy than others. Standard appraisal evaluations offer increased accountability, but licensed appraisers determine home values for different purposes. This creates the need for the different appraisal methods. An appraiser with extensive experience in one geographic region and with training to calculate the value of one type of property, such as condo, co-op, planned development or single family residences, typically offer the most accurate appraisals. An appraisal report includes from two to several hundred pages of evaluations.
Location plays a factor in home appraisals in several ways. The overall price of homes in the neighborhood influences the value of the appraisal home. The value of the home undergoing the appraisal in a planned community or suburban housing track varies with the location within the development. Homes located near busy streets, for instance, have less value compared with houses in the same neighborhood located on quiet, interior streets. Houses with larger lots, surrounded by mature trees and with views of water, including ponds, lakes or the ocean, have higher appraisal values compared with homes without these features. Some cities have higher general appraisal values than homes in neighboring communities due to quality schools, city services such as community parks and pools, access to municipal water and sewers, and close proximity to shopping and medical care.
The condition of the home influences the appraisal value, but cosmetic issues such as interior paint typically don't decrease the overall value of the home. Appraisers look at the general condition of home features requiring major investment to replace. The condition of the roof, for instance, significantly impacts the home value due to the high cost for replacement, and appraisers calculate the remaining roof "life" as part of the overall appraisal. Houses with a large amount of deferred maintenance and damage, such as leaking roofs and plumbing, water damage, mold and insect infestation, have lower appraisal values.
The features of the house and property impact the value of the appraisal. The square footage of the home's living space, size of the garage, property size and the presence of any patios or covered porches influence the value of the home. Appraisers assign increased value for homes with full bathrooms that include a sink, toilet and bathtub with shower. Half baths without a shower or tub add value, but not as much as the full bath. Air conditioning, a high-efficiency furnace and a water softener system also increase value. Kitchen features add significant value. Appraisers assign greater worth to kitchens with dual built-in ovens and stovetops, for instance, compared with stand-alone ranges.
Construction Materials and Methods
The type of materials used to construct the house influence the appraisal value. Exterior features impact value. High-quality windows with insulation, for instance, have greater appraisal value compared with less-expensive, vinyl windows. Vinyl siding appraises at lower values compared with brick houses. Tile appraises higher compared with asphalt shingle roofing. The quality and age of the "mechanicals," including the furnace, water heater and kitchen appliances, impact appraisals. Interior features also influence the home value. Tiled or granite baths bring higher appraisal values compared with fiberglass set-in bathtub units and laminate counter tops. Appraisers also value basements higher than concrete slab foundations.
- Texas Comptroller of Public Accounts: Window on State Government -- Appraisal
- Kingsmill Realty: Factors That May Determine a Home's Final Appraisal Value
- National Mortgage Alliance: What Is an Appraisal?
- Rocket Mortgage. “Refinance Appraisal vs. Purchase Appraisal.” Accessed June 8, 2020.
- Rocket Mortgage. “Home Appraisal: What Is It, And What Does It Cost?” Accessed June 8, 2020.
- Appraisal Institute. "Frequently Asked Questions," Page 1. Accessed June 8, 2020.
- Fannie Mae. "Uniform Residential Appraisal Report (Form 1004)." Page 4. Accessed June 8, 2020.
- HUD.gov. “Streamline Your FHA Mortgage.” Accessed June 8, 2020.
Lee Grayson has worked as a freelance writer since 2000. Her articles have appeared in publications for Oxford and Harvard University presses and research publishers, including Facts On File and ABC-CLIO. Grayson holds certificates from the University of California campuses at Irvine and San Diego.