Use these four tips from a professional appraiser to make your
home appraise for more and increase its appeal to potential
Many sellers are disappointed when the appraisal for their home
comes in much lower than expected. While it's easy to blame the
appraiser, it's more effective to learn about the complicated
appraisal process and the areas where you truly have influence.
"Homeowners are always asking me what their house is worth right
when I'm done looking at it," says Scott Murphy, the president of
D.S. Murphy and Associates, an Atlanta-based real estate appraiser
and consulting firm. "I try not to guess in advance, though,
because the market changes so often and it really is a mathematical
process that we go through."
"As appraisers, we look at public records, the physical
information on the property, and comparables in the same area,"
says Murphy, "but our job is also to put ourselves in the shoes of
a typical buyer."
Murphy shared four tips that will help homeowners to get a
better understanding of the appraisal process, raise the appraisal
value of their home, and learn more about getting a "for sale" home
ready to impress potential buyers.
1) Focus on the curb appeal.
"Everybody says that kitchens and baths are where you want to
focus your improvements," says Murphy. "Yes, that will give you
your highest rate of return, but especially in a market like this
where there's so much inventory, you really want to work on your
curb appeal too."
Curb appeal is a term that generally describes how your house
looks from the street. Murphy suggests that you start by actually
standing in front of your house to look for obvious issues. While
this seems obvious, many people don't do it. "If your shutter is
kind of hanging off of your, house fix it!" says Murphy. "Anything
to get that kind of curb appeal is important in this market. "
While improving curb appeal might include some landscaping,
Murphy cautions not to go overboard. "Don't spend $10,000 on
landscaping," he advises. "Because typically a buyer doesn't
appreciate it or give you back that investment. When you put money
into a kitchen, you're going to get 80%-90% back, but landscaping
generally only gives you around a 30% return."
2) Don't give buyers an upgrade allowance.
One school of thought is for sellers to give the buyer an
allowance rather than make improvements like removing wallpaper,
changing out carpet, and painting walls. Their rationale is that
the new buyers would rather pick out their own colors and
"In my opinion," says Murphy, "It's never a good idea to give an
allowance to the buyer. You won't get as big of a return. You want
those people to come into your house and be wowed."
While it might be nice to give them a choice of colors, the
renovation effort involved often outweighs the benefit. "Just pick
out a neutral color and they're going to be happy with it," advises
Murphy. "People right now don't want to do a lot of work when they
move in and most lenders will not allow them to do escrows. For you
to do things in advance like change the carpets and change the
paint-it's going to make a real difference when the buyer goes to
get their mortgage."
3) Consider the real return on high-cost
High-cost home improvements can be a real gamble. Like anything
meant to add worth to your home, it only has value if it is
consistent with what other buyers would expect in that area.
Some higher cost additions that you can do to raise the value
include adding things like new kitchen appliances and kitchen
countertops. Again, those are going to have a good return as long
as you are consistent with the market.
"You might be from South Florida where everyone loves pinks and
blacks and find yourself trying to sell a house in an area where
tastes are very different," says Murphy. "They sell granite or
style-stone in a million different colors. It's going to cost you
$5,000 to put a new countertop in your kitchen whether it's sea
foam green or a nice tan that's appealing to the general market.
You want to appeal to the broadest market that you can."
The best way to get in touch with what is appealing in your
market before you spend any money is to get advice from an
experienced real estate agent or tour other homes for sale in the
What high-cost improvements aren't ultimately a good investment?
"Pools would be number one-but it depends. Because if you're in
Florida, a pool is going to bring you a much higher rate of return
than if you are in New York," says Murphy. "Typically, pools and
finishing below grade space or basements give you the lowest
percentage of return."
Green renovations are another high-cost home improvement that
doesn't necessarily translate into higher home values. "The market
is embracing energy efficient improvements at a relatively slow
pace," says Murphy, "so don't get too far ahead of the market.
Don't go and throw up solar panels and similar improvements that
you may not get your money back for."
4) Use an appraiser to your advantage.
Murphy's last piece of advice to improve your appraisal is to
fight fire with fire and hire an appraiser for a consultation.
Appraisal firms like Murphy's will do a consultation that will
accomplish three things: 1) get the right value assigned to the
house to set your expectations, 2) point out potential issues that
will come out in the appraisal process so that they can be fixed in
advance, 3) and suggest other improvements.
"We can come in and make some significant suggestions other than
just "paint that wall" or "change that carpet,"" says Murphy. "We
can say, "You might need to add a bathroom, or turn this room into
a bedroom, and it will cost you this, but it will get you this much
Another advantage of this type of consultation is support when
your home actually gets appraised. "We're there during the whole
transaction so that when the bank appraiser comes out from the
other side of town and doesn't know what he's doing, we'll be there
to represent the seller and write a letter of rebuttal to the
lender if necessary."
For all of these reasons, the expense of hiring actual appraiser
to coach you through increasing the value of your home may be some
of the best money that you spend during the sales