Certain Improvements Effect Appraisal Values More Than Others

Appraisal Value and Market Price

The appraisal value of a home or property is not always based on the same set of criteria as buyers use, and more importantly, upgrades made to improve the owners’ standard of living may not always be reflected in a higher appraisal. Mortgage companies require appraisals to determine the home’s value relative to other similar homes in the general area and its ability to maintain its value throughout the life of the loan. While visible upgrades improve the overall impression of the home to an appraiser, certain actual improvements increase the appraised value more than others. Check these out to get the best return on your home improvement investment.

The Basics

Remember, professional appraisers may be able to look past the handprints on the walls and dirty carpet, but for the best return on your dollar don’t give them a reason to question what might be in that carpet padding or whether the whole house needs painting. Clean or repaint marked or faded walls paint. Remove peeling or stained wall coverings: a freshly painted surface makes a better impression. If your home is older than 1978, peeling paint can significantly impact an appraisal due to the possibility of lead exposure. Have carpets deep-cleaned and address any stains or smells. Pet and smoke odors reduce value because appraisers know that to get them out may require removing carpet and padding, priming and painting walls and ceilings or other costly measures. Check plumbing for leaks and drips and have those repaired. Repair broken or cracked windows. Make sure to deal with pests like roaches and mice. While these don’t add a lot to the actual value of the house, they let the appraiser know that the property has been cared for. Pick up clothing and toys: it’s easier for the appraiser to do her job and gives the impression that the home is cared for. Make sure to replace any burned out lightbulbs.


Make sure the appliances belonging to the house work properly. Descale the dishwasher and clean the oven and microwave. Again, caring for these items shows basic maintenance to the home and improves the overall condition rating. Replace an old water heater and make sure water and air filtration systems, softeners, in-line humidifiers (or de-humidifiers) and exhaust fans all work properly. If the home has other built-in appliances, such as heated towel racks or ceiling fans, for example, make sure they function correctly.

Major Systems

Before spending money to add a bonus room, make sure that the home’s systems are in good repair. If the furnace is old, or the air conditioner doesn’t work, repair or replace it. Even a squeaking furnace fan can cause questions, so have it checked out and fixed. In older homes, updating plumbing and electrical systems adds value since buyers will question the expense to replace them in the near future. Specialty items such as in-floor heating systems, whole-house stereo speakers, security and intercom systems, and fire sprinklers should all be tested and repaired.


When considering structural upgrades, the best return on your investment will come from upgraded exterior coverings. Painting the exterior gains you nearly 200 percent return on your investment. If you live in a hailstorm-prone area and are considering selling, make sure to have insurance work done and if possible, pay for upgraded materials like foam-lined heavy-duty vinyl siding, higher-grade roofing materials and seamless gutters. Concrete fiberboard siding adds value and resists hail damage, so it is a good option for an improvement project. Other exterior improvements that add value and curb appeal are new entry doors, garage doors and front windows. Some appraisers estimate a seventy-two percent return on these exterior investments. Replacing all the windows with
Simple landscaping improvements such as solar path lighting, cleaned up flowerbeds and a green, trimmed lawn may keep your house from being compared to the neglected foreclosure down the street. A poorly maintained, overgrown yard and piles of debris will lower the condition value.

Renovations and Additions

Before spending thousands of dollars to upgrade to that gourmet kitchen, consider this: an attic bedroom addition has the highest return on investment. Only basic upgrades and rehabilitation of kitchens and baths have significant impact on the bottom line, and improvements that take the home beyond the norms for that community rarely raise the appraised value and may be considered excessive. Adding a full or partial bath, however, can improve the appraised value as much as 10 to 20 percent of the home’s value.
Increasing the usable square-footage by finishing out a basement for a family or media room will add value, but combining two small bedrooms into one large bedroom with a walk-in closet may actually lower the value. Adding or reconfiguring closet space to be more useful, or moving a basement laundry room to the main floor also may up the value for some areas.

“Green” Renovations

Some “green” renovations may improve the appraised value but since these differ by locale, only a local appraiser can help you decide which are best. Some that improve  values for most areas are energy-rated windows (as noted above), added insulation and Energy Star appliances.

Things to Remember

Create and keep a list of all improvements and updates made to the home. Make a sketch of original square-footage and the additions you’ve made available to the appraiser. Note the year of the improvement and its approximate cost. Pay particular attention to the items more difficult to see such as wiring, plumbing or insulation. Bear in mind that appraiser commonly rate value in $500 increments. If a repair would cost $500 or more, be sure to have it made because otherwise it could reduce the value of the property.

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