Residing in a home can stimulate the imagination and seduce one into adding the “perfect” tweak to enhance livability and enjoyment in the house. Unfortunately, when it is time to refinance this home, the wrong tweak may actually lower the value of the house.
Hard Learned Lesson: My neighbor recently replaced his coat closet with a shower stall. Upon entering the home, the first thing in view is a frosted glass shower door. My neighbor’s hope was that he now had a 2 bath home, the appraiser didn’t agree. This oddly-placed added shower has now lowered the value of his home according to the home appraiser during the refinance process. It was deemed an undesirable feature.
So What Determines Value?
The appraiser who is valuing your house will compare your home with other homes with comparable upgrades and condition, which are selling and/or have sold within a certain distance from your home, within a certain period of time, i.e. the last 6 months. These are the most important factors in determining your home’s monetary value. An appraiser will also consider other nearby properties that are currently for sale, and the average amount of time those properties spend on the market. If homes like yours are in high demand, this will help to increase the value of your home.
The appraiser will also take neighborhood factors into account as well as the type of residence you own. How does the size of the structure and lot compare to other homes in the area?
The local zoning laws which designate restrictions on land use, may affect the value of the property your home sits on. Land earmarked for apartments may have a different value than land slated only for single-family homes.
Condition of the Home
Finally, there is the quality of your home itself. What kind of condition is it currently in? Was the initial construction high quality? What improvements or renovations to the structure have been made since it was purchased? It’s common knowledge that a larger number of bedrooms and bathrooms increases the value of a home, but other special features, like a garage, large yard, or two sinks in the master bathroom, hardwood floors, fireplace and granite countertops can increase the value to your property. Improvements that are mainstream versus custom tend to appraise higher. That unique specialty hand painted sink from a bazaar in South Africa may not raise your home value as much as a more standard vessel sink from the local home improvement store.
Now that you know what an appraiser will be looking for, you can begin the refinancing process with confidence! You can also be confident that the staff at Advantage Home Plus are experts in understanding this criterion and are here to advise you about the best way to approach refinancing. Advantage Home Plus can save you THOUSANDS of dollars in closing and financing fees and will walk you through the process. Please contact us at 1-800-376-4603 or firstname.lastname@example.org to discuss your circumstances to use your employer benefit home ownership program.