Home appraisals help a homeowner to understand the value of their home and are helpful for any large projects or renovations. This information is necessary for insurance plans, refinancing of mortgages, and planning for renovations or additions.
Nothing should stop you from creating the home of your dreams, but certain renovations might not make financial sense if your overall home value is limited by location or size. The size of your lot and the area of your property are essential components that influence a home’s value, together with the surrounding local market. You can work to improve your home’s value, but it is near impossible to estimate the contribution to the house value a renovation can provide without first looking at the big picture.
Value Factors Out Of Your Control
Anyone that owned a house during the ups and downs of the housing market knows that the price of homes can vary wildly even though no significant changes to quality, size, or location took place. The cost is primarily driven by market factors, such as the availability of loans and amount of people looking to buy in your area. Still, the size, location, and renovations of your home help your home’s value to exceed the comparable houses in the area.
Many things you might not realize also play a key role in home value. The new grocery store or park that was built down the road can be a massive boon to your home value, and nearby schools are always a critical component of price for family-sized homes. General trends in an area, such as crime, break-ins, and thefts, might also cause one area of town to change in price rapidly compared to others.
An appraiser will do the actual evaluation of your home’s value. Appraisers are often hired by the lender, such as a bank, to visit the property and determine its market value. They will research the other houses in your community to see their appraised values and compare their features to yours. The previously discussed factors will affect most homes in the same immediate area as yours. Things like the size and shape of your lot, the square footage of your home, the number of rooms, and additional amenities like decks or inground pools will be evaluated directly against your neighbors. The home’s history also plays a role in determining its value.
Renovations That Affect Value and Home Appraisals
In order to increase your home value, you can renovate rooms in your home to make them stand out compared to the other houses nearby. Smaller houses benefit more from room renovations such as kitchen or bathroom remodels, while larger houses gain more from additions such as outdoor kitchens, pools, and whole house tiling/hardwood installation.
It is hard to look at your home and not feel immense pride, especially if you undertook renovations and formed lasting memories in that very house. However, that doesn’t necessarily mean every potential buyer will see it the same way. Renovations are not always a direct return on investment. Make sure any renovations you undertake also complement your lifestyle and bring joy to you and your family as you continue to live in the home until your eventual sell date. Selling or refinancing your home can be a hassle. However, learning the how and why of your home appraisal allows you to go into the process with a better understanding of the situation.
West Coast Design Build Florida is a Sarasota-based contracting company specializing in kitchen, bathroom, and lanai renovations.
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