Will Structural Damage Affect a House's Appraisal?

Home appraisals determine the value of a house when applying for a loan, attempting to purchase or sell property or any time that the homeowner wishes to know his property's worth. If the house has structural damage or other foundation problems, this can negatively impact the final appraisal value of the property until it is repaired.

Home appraisals are performed by a professional appraiser who inspects the property and determines how much it is worth in the current housing market. The appraiser considers the size of the house, current market value of similar properties in the area and its layout and condition. Other considerations include household amenities, internal and external appearance, overall square footage and materials used in the home. The appraisal value can limit the amount that you can borrow when trying to purchase a home. It may also affect your asking price when trying to sell.

Structural damage is damage to the foundation or underlying structure of a house. The damage can be caused by a number of factors including flooding or water leaks, mold or mildew growth, earthquakes or the gradual erosion or shifting of soil beneath the foundation. Termites and other insects can also cause severe damage to wooden portions of a building's foundation. As structural damage becomes more severe it can cause sagging floors, cracks in walls and other damage to the house.

A home with structural damage can have a significantly reduced value during appraisal. Because the entire house is affected by the condition of the foundation, any weaknesses or damage there is seen as putting the entire house at risk. The effect on the appraisal value depends on the type and severity of the damage.

The appraisal value of a house can be increased by repairing foundation damage. Structural damage repair often requires a professional to perform the repairs and may require a significant amount of work to complete depending on the type and amount of damage involved. In addition to patching cracks, installing additional foundation support and replacing damaged or rotted wood, excavation may be necessary around the foundation to seal leaks or adjust shifted soil to prevent future damage.