What Decreases the Appraisal of a Home the Most?

by Amber Keefer
Appraisers evaluate the general condition of a home.

Appraisers evaluate the general condition of a home.

Whether you are buying a home, refinancing an existing mortgage or applying for a home equity loan, the lender is going to require an appraisal. You have reason to be anxious until the appraisal report comes in since a low appraisal can reduce your chances for loan approval -- or for loan approval of the amount you want to borrow. Both the obvious and not-so-obvious features of a house can affect its appraised value, according to Zillow.

Home Location

The location of a home can lower the property’s value. In fact, location is a major factor affecting how much a home is worth, points out personal finance expert Liz Weston for MSN Money. Homes that are situated in rundown neighborhoods or where there have been a high number of foreclosures and short sales tend to depreciate in value. Close proximity to highways, airports, railways and factories can also decrease a home’s value.

Home Size

Size is another factor that can affect a home appraisal. If you are looking to sell your home at some point in the future, home buyers generally want homes that have at least two bedrooms, more than one bathroom, a family room and ample storage space. While small rooms can decrease a home’s value, having a home with substantially more square feet than other houses in the neighborhood can also mean a lower value. Study findings published in The Appraisal Journal found that homes larger than the average-size home in the same neighborhood sell for less while homes that are smaller tend to sell for a more than the average-size home.

Basic Amenities

A house that has no garage or only a single-car garage usually doesn't fare well on an appraisal. Home buyers generally want at least a two-car garage, points out Kenneth Austin, co-author of “The Home Buyer’s Inspection Guide,” in an article for Bankrate. Lot size can affect the value as well, more so if it's a small lot. A basement, and particularly a finished basement add value. However if the unfinished basement is wet it indicates moisture problems, which detracts from the value.

Overall Condition/Interior Aesthetics

Repairing or replacing a roof is a major expense. Consequently, appraisers check to see whether a home’s roof is in good condition. Not keeping up with general repairs will hurt an appraisal as well. It helps to keep your home well maintained, inside and out. Old, drafty windows, worn carpeting, leaky plumbing, outdated plumbing and light fixtures and an ugly, outdated kitchen decrease home values as well.

About the Author

Amber Keefer has more than 25 years of experience working in the fields of human services and health care administration. Writing professionally since 1997, she has written articles covering business and finance, health, fitness, parenting and senior living issues for both print and online publications. Keefer holds a B.A. from Bloomsburg University of Pennsylvania and an M.B.A. in health care management from Baker College.

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