How Appraisers Determine the Value of Northwest Valley Properties
Part of the home buying process is getting an appraisal. Your lender will require an appraisal, and even if you’re paying cash, it’s a good idea to have an appraisal done to make sure you’re not overpaying. It’s not always easy to understand how appraisers determine the value of Northwest Valley properties. An appraisal is the process of developing an opinion of value. In general, appraisers look at recent sales data for similar properties, the condition of the property, and location.
What Appraisers Look at to Determine Value
The first way appraisers determine the value of Northwest Valley properties is based on the market as well as the condition of a property. Here are some of the things that “condition” involves:
This goes back to the very basics of a home’s construction. They will look at the foundation, the walls (especially with respect to solid framing), and of course, the roof. The appraiser will be looking for any defects or damage to these basic construction components to ensure that the mortgage lender is lending on a property that has the required equity.
The square footage of the home as well as the size of the lot the house sits on are also considerations that the appraiser will be looking at. These also help determine the value of Northwest Valley properties. The larger the lot and the larger the home, the more value it has. But there is so much more involved than just size. Obviously, larger lots and larger homes are worth more, but mere size doesn’t tell the whole story. A larger home with more bedrooms and bathrooms will be worth more than a similar sized home with fewer of these rooms.
CONDITION OF INTERIOR
What’s on the inside, especially inside the walls, matters as well, nearly as much as the basic exterior construction aspects. Here’s what appraisers look at on the inside:
- Bathroom fixtures
- Kitchen appliances
In addition to the construction, location and property size, appraisers determine the value of Northwest Valley properties based on the number and quality of improvements. These value-increasing improvements include such things as a bathroom remodel, kitchen update, new floors, new appliances, and installation of a new HVAC system. These updates contribute to the property’s lasting value and so are attractive to both lenders and buyers.
Appraisers will also factor in any extras when calculating market value. These extras can be anything from a pool to a deck to a security system.
The Process of Determining the Value
Appraisers determine the value of Northwest Valley property using a fairly standard and objective process. Appraisers can use different methods or models for evaluating and determining value. After looking at all the information and different facets, the main tool for calculating the actual market value is called the comparable sales price approach.
Basically, an appraiser will use the available market data to compare the homes that are most like the home in question. Some of the things that they look at are proximity, more consideration going to those similar homes that are in the same neighborhood or close by.
Another factor is going to be how recently the comparable homes have sold. The ideal data would be for homes in the same neighborhood that sold in the last three months. While appraisers can use older sales or even consider and use homes outside the neighborhood, the homes used to compare must be the most similar to the house being appraised. They will be looking for similarities in square footage, bedroom and bathroom count as well as similar construction. Appraisers will be comparing like homes to like homes. For instance, if your home is a two story, they typically won’t be using a single-story home to compare with yours. In the event that they need to use some homes that fall outside of the ideal category, they will make adjustments for any differences.
By comparing one home to a similar home in the area that recently sold, this will the appraiser a pretty good idea of what market value is. Don’t forget that age, location, current condition, any upgrades as well as amenities will all be factored into the determination of market value.
So, that’s how appraisers determine the value of Northwest Valley properties. Still, there’s more that goes into it – especially such subjective matters as soiled carpets and odors – and you can even challenge an appraisal you think is too low.
Do you want to learn more about the way appraisers determine the value of property in the Northwest Valley? We can help! Send us a message or give us a call today! (602) 806-8834
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