Appraisals, Part Deux
We figured if we threw a little French into the headline of this week’s edition, it would sort of class it up because, let’s face it, the French have given us some of the finer things in life: fine wines, high-end fashion, and hopelessly devoted Jerry Lewis fans. The world wouldn’t be the same without them.
Three weeks ago, we talked about the Condition Ratings that appraisers use to categorize and support their valuations of homes. Specifically, we detailed how important it is to read the comps for surrounding homes so you can help your clients realistically price their homes when listing. We’ve heard back from a lot of you that this has been extremely helpful, so we wanted to revisit the topic of appraisals and give you some more tips that will help you stand out from your peers and impress the daylights out of your clients – we’re talking about upgrades!
Not all upgrades are the same – nor are they worth the same in the eyes of an appraiser. For example, if your client spent $6K on a brand-new HVAC system two months ago, she’ll be able to get a dollar-for-dollar reflection in the appraisal. Come on, this is the desert – a new HVAC system is like handing someone a key to Shangri-La and/or Heaven (depending on their philosophical or religious views). For those clients who are getting ready to put their homes on the market and are considering an HVAC upgrade, if they already have a swamp cooler, give them this advice: definitely install the new HVAC system but keep the swamp cooler, also.
Another dollar-for-dollar upgrade is a garage. This applies either to the costs for enclosing a carport or building an entirely new garage onto the property itself. We’re a car culture, and the appraisers know it.
Here are some other upgrade items that generally fetch consideration from an appraiser in the ballpark of $.30 to $.50 on each dollar spent:
• Kitchens – no matter how much they love that Viking range or built-in Sub-Zero refrigerator, they need to know they’re only going to get a percentage of their costs in the appraisal
• Pools – your client may have imported tiles from an Italian monastery and had a pirate ship trucked in from the Bahamas, but they’ll only get so much for them
• Bathrooms – it’s nice that they can fit the entire family and their three cousins into the bathtub at the same time (kind of weird), but that feature won’t appeal to everyone so the appraisers will only give a percentage
• Windows – bulletproof, specially glazed, shaped like the silhouette of Jerry Lewis, etc., an appraiser is only concerned about cost of the materials and what percentage they’ll assign
Give us a call about these and other upgrades – we’ll help you look like a rock star!