Many people wonder what factors help to maintain or add value to their home over time. There are two types of values property owners should consider. The first is the tax assessed value of a property. The second is the market value and it is the focus of today’s topic. Now more than ever appraisals are impacting the values associated to areas throughout Austin and the rest of the country. If you are attempting to sell a property but recent sales in your area do not support the sale price it can impact the sale in a negative way. If you are purchasing a property and are planning to finance a portion of it the appraisal can have bearing on how much money you will have to put down on the purchase. I recently spoke with appraiser Bill Terry of Bill Terry and Associates who shared with me the formula appraisers look for when valuing a home.
The first and most important factor appraisers assess is the location of a home. Second, comparable sales in the immediate area are extremely influential on a home’s value. Comparables are based on a timeline of properties sold within 90 days. Some lenders allow appraisers to extend that time period to 6 months. If your property is unique for the immediate area appraisers may consider properties in nearby areas that offer similar features. The third factor appraisers consider is the size of a home.
Terry also mentioned a few other determinants that impact the value of a home. If you are thinking about building a home that you may one day sell consider the area and make sure the design of your home is functional and appealing to a wide array of buyers. Finding a builder that has a good relationship with an architect is important. On a price per square foot basis, smaller homes are usually (but not always) more expensive. One story homes cost more to build per square foot due to foundation and roof costs and appraisers recognize the value.
Terry also mentioned the importance of a nice streetscape and home elevation. Ceiling height and design appeal are very important. Outdoor living spaces with fireplaces and summer kitchen also impact the value of a home. The main areas he recommends focusing on for design appeal are the kitchen and owner’s suite bathroom. Be careful not to over improve or add too many features that are not common to homes in the immediate area. Make sure to find a good real estate agent in your area to help confirm market trends and values.
