A new property is an exciting chance at value and money: and an appraisal is the best way to find out how much your property is worth! If you’re excited to find out the deal but aren’t sure how to go about this, this is everything you need to know.
Why an Appraisal Matters
The appraisal gives you a clear view of what the market value of your home would be. This is useful for taxes, deciding how much to sell your home for, and keeping track of how much return is growing into it.
An appraisal is a must, also, if you decide to borrow against your home’s equity in the future, but that’s not as important when the property is brand new. This appraisal will tell you how much is safe to spend on any area of your home, though, since the general rule is to never pay more than 20% of your property’s value on any room or space. Over this amount, it’s nearly impossible to get back a good return on investment.
The Times Most People Get New Homes Appraised
Most people get new homes appraised before and after their building process. It’s also important to get your home appraised before listing it to ensure you’re not listing it for too little or an unachievable amount too high.
If you’ve completed a lot of construction and work on your property, it could be the perfect time to get your home appraised and have it ready for the future.
When Not to Get Your Home Appraised
If you’re halfway through your project, or you know you have a tight budget, and you’re not done yet: don’t get your home appraised. On average, the wait time for a home appraisal can take one to two weeks, but in an extremely busy area, it can take up to four weeks. Give yourself a week from when you plan to be done with the work on the property, and plan the appraisal for then. This will give you wiggle room if something goes wrong and you have to look into new insulated roofing systems or get your lawn back into shape after a rough storm.
Difference Between Appraisal and Home Inspection
Although both an appraisal and a home inspection require you to work with a professional to inspect your home: they have different goals in mind. An assessment will determine what the fair market value of your home might be. This will tell you how much you can list your home for and can sometimes give you hints at what you can do to improve the property.
A home inspection will go through and look at everything from the shear wall construction to what materials you used in the home and identify any parts that are at risk or in need of repair.
The home inspector will leave you several pages of repairs or notes and will charge between $100 to $500 for the service. In comparison, most appraisals are either free if it’s a realtor you’re considering going through or less than $500 depending on the size of your property.
Why Updates Can Change the Value
Plenty of updates will change your home’s value and allow appraisals to go differently. Some of the largest changes are aesthetic, like adding epoxy-painted concrete floors or updating the greenery on your property.
Others, like replacing an older roof, or repairing cracked concrete and driveway, can make a huge difference. These allow your property to function better and build value directly into it, which can translate to a higher market price.
What to Do After Your Appraisal
After you’ve received your appraisal, you have a couple of options. You can either list your property or wait and do more work on it. A new property may not need a lot of work done, but there are still changes you can make. Looking into options like a cesspool vs. septic tank system or whether adding solar is an option is still valid and useful.
Can You Have Another Appraisal?
Yes! You can have multiple appraisals. In some cases, if you feel like the assessment wasn’t well-done, it might be a good idea to have a second opinion. In other cases, if you’ve done a lot of work on the property after the first appraisal was completed, it could be a good idea to get another done. The price adds up, so make sure to budget for this if you want more than one appraisal.
Do You Have to Share Your Appraisal?
Unlike a home inspection, there’s no need to share your appraisal. An appraiser has to follow a professional ethics code that ensures they can’t disclose confidential information or assignment results to anyone you don’t want them to. This means if you get multiple appraisals, you don’t have to worry about them knowing what the other person said before they gave their estimate as well.
Every New Property Needs to be Appraised
Whether you’re selling your property or not, it’s a good idea to get it appraised. Consider hiring an appraiser soon so you can learn your home’s true value.
Max Shafer is a freelance writer that loves sharing his knowledge and expertise on real estate. He lives in Land O’ Lakes, Florida where he enjoys spending time with his wife and researching real estate trends in his free time. Max’s work as a freelance writer can be found on Building Product Advisors, a new construction industry resource launching in Fall 2022.