The New Oxford American Dictionary defines an appraisal as an expert estimate of the value of something. In the current housing climate, expert appraisers have become mathematicians instead of evaluators.
In my opinion, there are 3 different factors that make up the worth of a home. Appraisers seem to consider just one factor—the size and age of the property compared to recent sale prices of other homes in the area that are of a similar size and age.
I think of the worth of a home this way:
- What are the “tangible” aspects of the home? i.e. what is its size, age, number of bedrooms, number of baths, etc.
- What are the “semi-tangible” aspects of the home? i.e. its condition. Has it been maintained and/or updated by the current owner? Does it have granite countertops, modern tile floors, upgraded cabinetry, high impact windows, storm shutters, etc. In my experience, appraisers in our area fail to compare these aspects to similar aspects of recently sold homes. How could they? They’ve never been in the other homes that they are using for comps, so they have no idea of their condition. We see fine quality homes appraised in comparison to distress sale properties that have fallen apart and are sold “as is”. It can be frustrating, to say the least.
- What are the “intangible” aspects of the home? i.e. would I want to live there? These aspects include its location, neighborhood, view, floor plan, exposure, curb appeal, warmth, openness, light, proximity to noisy traffic, association rules, reputation of the community, etc.
Almost always, it is aspects #2 and #3 that attract someone to make an offer to buy a home. If a buyer wants a “home” in addition to an “investment”, it may be necessary to look beyond the mathematical calculations of the appraiser. Not all 2000 square foot, 3 bedroom, 2 bath homes are of equal value. Perhaps it is time that common sense be included in the appraisal. Is this asking too much?