When you're buying or selling a home, there are a lot of numbers that come into play. There's the asking price, the closing costs, the interest rate on your mortgage, and more. In terms of the appraisal, there are some numbers that can have a big impact on the home's appraised value and some that won't matter as much as you think. Everyone always talks about location, location, location. While location is important, numbers are too. Here's what you need to know.
One Number That (Surprisingly) Doesn't Matter
- Age. You might have a well-meaning friend from work tell you that newer homes will appraise for more than older homes. They don't. While newer homes do have features that buyers are looking for, age does not affect value. Like people, age is just a number.
3 Numbers That Do Matter to the Appraiser
- Square footage. Houses sell by the square foot. Therefore, the size of your home is an important factor that appraisers take into consideration. Larger homes will almost always appraise for more than smaller homes simply because they offer more square footage. In fact, both your real estate agent and your bank's appraiser arrive at your value by dividing the price for sold homes in the area by the square footage. They can then apply that average price per square foot to your home. In other words, if the average price per square foot for sold homes in your area is $173 and your home is 1,000 square feet, $173,000 is a good starting point for an appraiser.
- Bedroom and baths. While that number may be a good starting point, the appraiser still has other numbers they are concerned with, including the number of bedrooms and bathrooms. If the average home sold in your area has three bedrooms and just one bathroom, but your home has four bedrooms and two full bathrooms, the appraiser will adjust your value upwards. Conversely, if all your neighbors have a 3-bathroom home, and you just have one, then the appraiser will deem your home to have less value.
- Parking spaces. In the United States, cars are king, and parking is important. So much so that the number of parking spaces you have will affect the value of your home. While 'parking' means different things in different parts of the country, how many spots you have will be of interest to the appraiser. If you live in a big city with deeded access to a parking space, your home is more valuable than one without parking. Similarly, if you have a three-car garage when all your neighbors have just a two-car garage, your appraiser will consider that value when completing the appraisal.
These are just some of the numbers that stand out to an appraiser when determining the value of your property. If you're thinking about buying or selling a home, it's important to consult with a qualified real estate professional to get an accurate estimate of your home's value.
Reach out to local home appraisers to learn more.