Special offer

Appraiser Reality Series part III- Lets talk Quality Shall We?

By
Real Estate Appraiser with Lanier Appraisal Service CR004373

In case you missed it I have started a Reality Series all about what appraisers see in the trenches and just how we go about our daily business in home valuation.

Sorry I have been gone for a few weeks but I just became a NEW GRANDMA! Mia is her name and she is the apple of her grandma & Grandpa's eye. Here is a picture of our little sweetie.

Grandma Mary with Mia

Okay now onto the series.

Quality is one area that we as appraisers must determine when we inspect a home. Depending upon how the home is rated it can make a significant difference in the overall value of the home in question.

** Look for my upcoming blog of the UAD (Uniform Appraisal Data Set) Fun times ahead for appraiser and all readers/users of appraisal reports...If you had any trouble understanding appraisal reports in the past, look out it's going to get really interesting!

Anyway, when we inspect a home, we start from the outside and look at such things as construction materials used. Brick, Stucco (Real or Synthetic), Hardi Board, Vinyl, Stone, Masonite, LP Siding, etc. Then we look at the roof, what kind of shingles do we see. 20 year Composite, 30, 40 or 50 year Architectural Shingles, Cedar Shake, Metal Roof material, etc.  We also look at exterior structures, pools, barns, decking, screen porches, open porches, Garages, ETC.

Then when we go inside and we literally look from the floor to the ceiling to see what quality items may exist. What is the trim work like? Is there a 2 story foyer, family room, etc. What is on the floor, hardwoods, tile, carpet, vinyl, etc. We look at the kitchen and baths to see what kind of counters, Granite, Corian, Laminate, what is on the floors, hardwood, tile, heated tiles, marble, etc, appliances, stainless, black, white, etc. ONE TIME we appaised a home with a custom French Stove with Gold Accents that cost $15,000! WOW. Yes you guessed it, they did not get full or even close to full credit for that item, but it sure looked nice!

We see how high the ceilings are, are there tray domed, coffered ceilings, etc. The variances in the amount of quality items that we see in homes is significant and they all have an impact upon value.

It is a good idea if you have someone selling a home with numerous upgrades to have them list them all out, including costs for the appraiser, just to make sure nothing is missed. This is not to say that everything added to a home will add value, especially if a home is over improved for the neighborhood, but many times there could be thousands of dollars in improvements that the appraiser needs to be made aware of especially if they are not obvious during a visual inspection of the home. 

Here is a Reality Fun Fact: We appraised a home once in an upscale Golf Course Development where the wife was bummed because her husband only would allow her a $100,000 allowance for FAUX paint! I kid you not, everything was faux, not just the walls but the cabinets and celings and the murals on the wall were pieces of artwork! As you can imagine, there is no way they will get this kind of return, however someone may walk in and just love it. Hard to put a value on that!

So the moral of this quality story is two-fold, don't be afraid to make that list of the upgrades, including costs and give this to the appraiser or leave it on the counter when they are set to appraise the home because they need to get some credit for all of these amenities. Secondly, if you have a home that has ALL the bells and whistles and it is not typical for the area, then they may not get the value they hope for on all of these improvements. But they should look at it this way....they enjoyed it while they were there and for them it was worth something!

Thanks for stopping by.....

Mary Thompson

Certified Appraiser

www.marytappraisals.com

 

 

Posted by

 

 

Comments(8)

Debbie Gartner
The Flooring Girl - White Plains, NY
The Flooring Girl & Blog Stylist -Dynamo Marketers

congrats on the new granddaughter.  She looks adorable.  LOL on spending that much on faux paint. Wow, yeah most people won't value it that much.  Crazy.

Mar 29, 2011 11:21 AM
Andrew Mooers | 207.532.6573
MOOERS REALTY - Houlton, ME
Northern Maine Real Estate-Aroostook County Broker

You are so lucky to be a Grammy! Diminishing returns and not everything done to a place is an improvement. I have seen staging images on total kitchen rehabs and hate to say it, but I liked the old one better, before the $40,000 or more was layed out. What can I do to make my home worth more? One common question. But just spending money in the wrong place won't come back.

Mar 29, 2011 11:29 AM
Sara Goodwin
Estimation Nation Corporation - Portland, OR
Portland, Oregon Appraiser

Hi Mary - Congrats!  I can't believe you're a gramma!

I have pointed more than a couple of folks to this website in regards to trying to find the cost verses value of the upgrades that they've done.  It's nice to have another professional source show people that upgrades will rarely recoop 100% of their cost.

Mar 29, 2011 04:58 PM
Mary Thompson
Lanier Appraisal Service - Flowery Branch, GA
Lake Lanier Appraiser in North Georgia

Sara: Thanks for the information. Some %'s seem high based upon what we actually provide in the way of adjustments in the appraisal, but it is great information especially for those who think they will get anywhere near 100% as you point out. This way they see it is not the appraiser who is to blame, it is the market! :)

 

 

Mar 30, 2011 12:57 AM
Craig Chapman
Call Realty / Access Appraisals - Mesa, AZ
The Value Guy

Return on upgrades appears to be related to the popularity of the item.  Something that everyone wants seems to return most, but if someone spends a lot of money on a odd item that nearly no one wants, guess what, not much return. 

Hey, consider a part of your series on AMCs demanding the signing of a indemnification in their agreement that goes way beyond what your E & O will cover.  It's a growing trend with AMCs that appear to be getting more predatory all the time.

Mar 31, 2011 11:35 AM
Sidney Kutchuk - Realty Works Temecula Kutchuk - Realty Works Temecula
Realty Works Temecula - Temecula, CA
Realty Works Temecula

Mary: Does this apply to all States or just yours....I just wrote a blog asking an appraisal question when you get a chance can you go over and answer it???    Congrats on becoming a Grand Ma!!!

May 18, 2011 12:44 PM
Mary Thompson
Lanier Appraisal Service - Flowery Branch, GA
Lake Lanier Appraiser in North Georgia

Craig: Thanks for the suggestion. Will address AMC's but unfortunately, we have basically no control over their agreements other than to NOT work with them or strike out the sections you dont want to live with. I tried that one time and guess what.....they said sign it as is or you are out...So I am out, I refuse to work with AMC's who play those games. Thankfully I have other Bank clients not using AMC's!

May 19, 2011 01:39 AM
Mary Thompson
Lanier Appraisal Service - Flowery Branch, GA
Lake Lanier Appraiser in North Georgia

Jane: Yes this quality issues applies to all states, all appraisals. As noted above, depending upon how popular the items is in a given area, that could affect how much return they will get. So for some states, some things may be more popular than in other states, but the theory is still the same as to how appraiser's look at these items and that you typically never get anywhere near 100% credit for the cost of these items. It would be a rare occassion.

May 19, 2011 01:44 AM