Hey Zoltar, how will our house will apprase?
February 25, 2013 10:03 AM Subscribe
How likely are these particular conditions of our home to affect an appraisal? Additionally, is there a significant benefit to addressing these condition concerns prior to appraisal for the purposes of a refi? Very long winded details inside…
posted by waterisfinite to Home & Garden (15 answers total) 1 user marked this as a favorite
We own our home in Nassau county, New York and are looking to refinance or modify our mortgage. We have only owned the home for 2 years so have little equity in the home though we do not believe we are underwater.
We live in an area that’s slightly tough to get comps for. Our neighborhood is split between a few different school districts, so that our home is in an award winning district, while a block away, homes are in one of the worst districts in the county. This significantly impacts home prices.
We bought our 1930’s era home for $300k in 2010. The home appraised at $325k at that time, while it was in slightly poor condition. We would need our home to appraise for $290k in order to qualify for a decent refi without PMI. Zillow (who I don’t trust) estimates our home is worth $10k less than that. Our local tax assessment noted our “Fair Market Value” in 2009 at $370k, in 2010 at $305 k, and from 2011 through 2013 at $277k. I have no idea whatsoever how our county makes these assessments (they have certainly not been inside our home since we bought it in 2010), nor how they affect appraisals.
We have done some updates including:
• Refinishing or installing hardwood floors in every room but the kitchen & bath
• Updating & enlarging one bedroom so that there’s one clear “master” bedroom (it’s got a walk in closet, though it doesn’t have a bathroom!)
• Updating the boiler & furnace (but NOT the pipes)
• Converting from oil to gas
• Installing appliances where there were none (dishwasher, washer/dryer, etc) & updating old kitchen appliances
• Landscaping front & back the yard, installing privacy fence, repairing grading issue in the yard which mostly fixed the issue of water getting into the basement..
• Installing driveway (there is no garage)
• Replacing 1930’s era steep staircase. This issue is tough – the original stairs were not to code, but were grandfathered in. They were absolutely unworkable, so we replaced them with a lovely custom staircase which allowed us to create an upstairs hallway with a gorgeous banister. However, due to the extreme space limitations, the treads are about ¼” short of current code. We made the decision to do this without permits. We have a particular worry that an appraiser will notice this!
What we have NOT updated/ Condition concerns:
• The crappy aluminum siding (it got worse in the recent hurricanes)
• The only full bathroom got some paint and updated small fixtures but is essentially still a crappy 1970’s bathroom
• The kitchen got new appliances and fresh stick-tile flooring but still has crappy 1980’s cabinets and counters.
• The basement remains crappy and unfinished, but DRY! (It can never be legally finished due to height restrictions)
• In the unfinished basement, there is a half bath. When we took out the old oil tanks, we had to remove the walls of that bathroom. They have not been replaced – does this mean this bathroom is not considered a half bath any longer? We would be willing to spend a few bucks on sheetrock to rough in some walls if it will significantly improve the appraisal.
• Our chimney has a crack in it. We are not likely to repair it before our refi.
There are only 3 comps sold in the past 4 months in our area & school district:
• A home with a 1 car garage, central air and completely new Kit & Bath, plus 3700 sq ft more yard sold for $389k.
• A home with a 2.5 car garage, one more full bath than we have, a finished basement and 1,000 more sq feet of yard sold for $352k.
• A home with one less bedroom, a 1 car garage and a recently done Kitchen & bath sold for $375k.
TL;DR: What issues with our house might affect the appraisal enough to attempt addressing them before refinancing? For example, poor siding conditions, crack in chimney, and other seemingly unfinished aspects of the house. There are limited comps in our area to compare to, but I feel we may want to move quickly since a few good comps have sold recently. What level of renovation is required to have our creepy basement toilet area considered a half bath on the appraisal, or will it not be considered because it is an unfinished basement?
And if you have an instinct for these things, do any of the very long winded details I’ve provided make you think “Hell yeah, your home will appraise for $290!” Pretty please?