What adds value to a home
Not all construction decisions are created equal. Some choices make a huge difference to your appraisal value. Here’s a guide to maximizing your new home.
*This information has been checked for accuracy and non-bias by licensed insurance experts and representatives from National 501c3’s specialized in insurance advocacy. We are not insurance brokers. Consult with a licensed professional about your insurance policy and specific situation.
What is
Appraisal
Value
An “appraisal” is an assessment of how much your home would likely sell for if you listed it at the time you have it appraised.
Your “appraisal value” is not necessarily what you would list a house for, (sometimes you can get a lot more or have to take less), but is a good baseline for what your home is worth.
who
makes the
assessment
Real estate appraisers are licensed professionals whose job it is to be a neutral third party.
They compare a property to what similar properties nearby have recently sold for. Typically that’s within 1 mile, sold within the previous 6 months.
“Comps” are properties that are similar in size, style, age, condition and lot size. Ideally in the same school district and neighborhood.
What
an Appraisal
is not
An estimation of what it would cost to replace your home.
Always accurate. You can dispute or order a second appraisal if you feel it’s in error.
What you might list the home for if you sold it. Sometimes a home will appraise for one amount but there is a housing shortage, or there’s something really special about it, and it will sell for a lot more. The inverse is also true.
why
appraisal
value
matters
Appraisal value dictates so much of your financial capacity. Here are a few of the ways you’ll see it impact your life:
1. Mortgages and Refinancing
Your appraisal tells the bank how much your home is worth. A low number can reduce or block your loan. A high one, especially during a refinance, can give you access to more equity.
2. Selling Your Home
If the appraisal comes in low, a buyer’s lender might back out or force a price drop. A solid appraisal helps keep the sale moving.
3. Home Equity Loans
To borrow against your home, lenders look at your appraisal. The higher it is, the more you can usually borrow.
how to
increase
appraisal
value
Obviously your square footage, number of bedrooms and bathrooms, layout, whether you have a pool, and quality of construction will have the largest impact your appraisal, but those things may not be areas you have wiggle room.
If you have to choose only a few things to splurge on that really move the appraisal needle, here are the most impactful ones:
Kitchen & Bathrooms
The size, layout, and materials you use in these rooms has a massive impact on your appraisal value.
Kitchen:
Countertop materials (stone vs laminate, composite or wood)
Flooring material
Quality of appliances
Quality and design of cabinet/drawer fronts
Enclosing the vent hood in something pretty
Kitchen island
Having an oven, garbage disposal, dishwasher, etc.
Bathrooms:
Glass shower doors instead of curtains
Tile floors (heated is obviously an add)
Floor to ceiling tile in showers instead of plastic surrounds or tile that stops at 7 feet up the wall
Beautiful tile that isn’t niche taste
Higher end faucets and shower heads
Soaking tubs vs standard tubs
Nice vanity lighting
Quiet exhaust fans
Medicine cabinets vs flat mirrors
Storage space
Roofing
This is a big one and is a choice you have to make with your architect/designer.
Some types that increase value:
Standing seam metal roofing
Concrete or clay tile
Class A architectural asphalt shingles
Fire resiliency
In an area that went through a well known mega-fire it will be important to build a resilient home both for your appraisal, and your ability to get insurance.
Building to IBHS standards can be the difference between getting stuck on CA FAIR plan or being able to get affordable regular insurance, which will also hugely affect your appraisal and resale value.
This is a conversation to have with your architect. For guidance on resiliency, click here.
versatile layout
The more universally useful and appealing your layout is, the higher your appraisal value because more buyers would be interested in your home. If your layout is hyper specific to your needs, it can lower your market value.
If you plan to live in your home forever, maybe this is less important to you.
Siding
Another critical big decision.
Some types that increase value:
Stucco
Fiber Cement
Metal
Windows & Doors
These have a big impact on your appraisal but also your energy bills and insurance discounts (if these are fire safe).
Solid core doors instead of hollow
Double pane, “Low E” windows
Metal vs vinyl framed windows
A nice front door has a surprising impact on appraisal
Skylights. These aren’t as expensive to put in as one might think.
French doors to the outside.
curb appeal
Don’t forget to budget for fencing, landscaping, hardscaping, outdoor lighting, trees and plants.
What an appraiser sees when they pull up has a huge impact on their assessment, too.