What Hurts a Home Appraisal? 16 Factors That Can Bring the Value Down
These 16 factors can lower the appraised value of your home, including your location, square footage, home amenities, and a lack of curb appeal.
Your scheduled home appraisal is nearing, and no matter the circumstances, it’s always an intimidating event. Whether you plan to buy, sell, or refinance your home, an appraiser’s opinion holds a lot of weight. So, what hurts a home appraisal, and is there anything you can do about it?
The lender will be looking for an appraised value to determine what they’re willing to lend on a property. The amount you can borrow through a home equity loan will also depend on the appraised value of your home.
Get an Estimate on Your Home’s Value
While not the same as an appraisal, HomeLight’s Home Value Estimator can be a great starting place to get an idea of your home’s value.
So, you wouldn’t be the first person to call your handyman in a panic or run the vacuum frantically before an appraisal while asking the universe for top value.
Let’s take a look at 16 factors that can affect your appraisal and why they’re important.
Why does appraised value matter?
The objective of an appraisal is to provide an “independent and impartial analysis of real property,” according to the National Association of Realtors (NAR). Appraisers are certified and licensed to perform these services.
The appraiser’s client typically is the lender, and the appraised value determines the amount of funds a lender is willing to provide or the amount of equity a homeowner can borrow.
“Lenders want to know how much that property would bring in an open market, so they can ascertain that the loan is well enough supported by the collateral,” says Rodman Schley, 2021 National President of the Appraisal Institute, a Chicago-based global professional association for real estate appraisers.
The appraisal also helps to shield a financed homebuyer from potential risk.
“Say the buyer loses their job a year later,” says Mike Ford, a general certified real estate appraiser in Southern California since 1986. “If they’re upside down, they can’t sell the house, and they’re likely going to have a foreclosure. If they buy it at the right value and something happens a year or two into it, they can probably get out with their skin intact. They may not have any profit, but they may not suffer any loss or at least as big a loss.”
