Why Does Our Home Appraise Less Than a Similar Home?

I have had many Clients ask me; ” why does our home appraise less than my neighbor’s home, it is almost exactly the same?” There are actually many reasons for two similar homes appraising at different values. The primary reason is the recent renovations completed in the competing home. Keeping your home updated and “modern” is critical for the current value of homes. A renovated home will not require any extensive renovations, unless the buyer is not satisfied with the current status. A second, very important reason is that if renovations have been completed, including any extensions, patios or garages without the required permits this will lower the value of the home, because the new buyers will have to pay double for updated permits. This can be costly, and even more critical it is seen as a major hassel for the new owner.
Overpricing your home in the first place may leave the impression with the seller that their home is under appraised. The changing market values can have an immediate impact on the appraisal The timing of the appraisal in a rapidly changing market may have a direct impact on the current appraisal, positive or negative.
Lot sizes and specific features may have a direct effective on appraisals as well. The quality and size of the bathrooms and fixtures, the size and quality of the kitchen and appliances are critical features, exterior finishing and outdoor structures like patios and landscaping. If one or more of these features and others are present in a competing property the appraised value may differ substantially.
One more final issue may be that the person doing the appraisal may be incorrect. If there is some doubt it may be a wise move to get an appraisal before you list in order to confirm the results of other appraisers, or to have an appraisal done following one that may be seen as incorrect.