How Is Your Charleston Home Evaluated by an Appraiser?

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Today I have Felicia Lane with us to discuss the ins and outs of appraisals. She's been doing appraisals for ten years and has done nearly 3,000 in her lifetime. She works with the Felicia Lane Appraisal Group and she is an expert in the Charleston market.

There are three different approaches to appraisals: cost approach, income approach, and market approach.

The income approach determines the value based on income that can be produced by that property. The cost approach determines the amount of money it takes to build or make improvements. The market approach is what you hear of most commonly, and that determines the market value of the home before it is sold.

So, how is a home value determined? Felicia begins by looking at comparable properties within the area. Comparisons are based on the number of bedrooms, square footage, location, and amenities. There are other things that can be compared, but an appraiser will pick homes with similar value indicators. These are often found by what is and is not selling on the market. If lots of 4-bedroom homes with large backyards are selling, then those features would increase the value of similar homes in the area. It really depends on what is selling and what is not. 

Depending on where you're selling a home, value indicators will be different. In downtown areas, larger homes with more bedrooms are very desirable as investment properties. The appraiser has to do their research on a given area before assigning a value because value indicators are constantly changing, no matter where you're appraising. 

Now if someone completely remodels their kitchen with all the latest and greatest appliances and fixtures, would they get the value back in an appraisal? This is a good question, and it's really something that would be determined by the market. It all depends on what the buyers are buying and if there is anything comparable in the neighborhood.

If there is no other kitchen like it in the neighborhood, it's hard to tell if that's a good or a bad thing. Every adjustment made by an appraiser has to be justified, and if there are no comparable properties, then this nice kitchen simply becomes a selling feature and it will not increase the value in an appraisal. This is why large kitchen remodels aren't always recommended when selling. 

Do banks allow you to make adjustments to values in response to increased or decreased demand? Most lenders don't allow time-sensitive adjustments because most times these increases in value are artificial and volatile. If something is happening over a long period, then adjustments can be made to compensate that increase in value. 
If you have any other questions, please don't hesitate to contact me and I can put you in touch with Felicia.

Leave No Money on the Table with these Six Home Selling Tips

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Want to buy a Charleston Home? Search all homes for sale

I'm not going to lie. Selling your home for top dollar will take some work. The good news is that it's worth it, because you can sell your home for 18% more by using these six tips.

1. Curb appeal matters. You have to entice the buyers with a nice exterior for them to want to know more about the interior. Plant flowers, mow the lawn, repaint your front door, clean your windows, etc. 
2. Declutter and depersonalize your home. Get rid of personal belongings such as old photos or artwork, and make sure the buyer isn't distracted by other things like clutter on your counter tops. Show off your home and not your belongings. Rent a portable storage unit if you need to - you're moving anyway. Depersonalize the home as well. You don't want a buyer to feel as if they're inside of someone else's home. You want them to feel like they're walking through their own home, so don't clutter the place with your belongings. Not many buyers want to see that giant moose head on your wall. Remove any excess decor that makes your home feel smaller. 
3. Fix things and freshen up your home. Repaint rooms in a neutral color, such as earth tones. Also, fix all of the obvious things around your home such as a squeaky door or a leaky faucet. If you notice it, the buyer definitely will, too.
4. Don't get too emotionally involved. That is when you can make mistakes. Remember that the home really isn't yours anymore when you're trying to sell it. 
5. Don't get greedy. Buyers aren't fooled by high prices, and they simply won't respond to high prices. Your home will sit on the market and you'll end up with less money than if you had priced your home right to begin with. 
6. Hire an agent with a solid marketing plan. Good marketing means your home will get a lot of demand, and a lot of demand means a good price for your home. I can put your home in front of thousands of eager buyers.

A bonus tip is to clean your home, but I cannot stress the importance of this. Your home needs to sparkle. Cleaning can really make buyers pay a little extra, so the elbow grease is worth it in the end.

As always, please don't hesitate to contact me with any questions you may have about selling homes in Charleston.