Are upgrades taken into consideration during an appraisal?

Question

I read on some sites that upgrades made to a home, such as wood flooring, new appliances and new paint, are considered during an appraisal, but my Realtor says the amenities don't matter, that the comps, square footage, condition, and age of the home are what appraisers look at. Which is correct?

Answer 1

The general condition of the home is considered, a newer roof or remodeling is a plus but sq ft and other things are the main part. They don't make judgements on if your remodel was an improvement or a buyer might like it and some improvements make it worth less like combining two bathrooms into one larger one.
Appliances and furniture don't do anything they aren't part of the house and paint is just paint they expect it to be reasonable and it doesn't add value, not everyone wants hardwood floors and fake hardwood is a negative to me it means the seller wasn't into quality. I am removing carpet and will refinish the hardwood probably then might just carpet over it again if it isn't as pretty as I want.

Answer 2

One very important thing to remember about realtors: 95% of the sales are made by 5% of the realtors. And YES, upgrades are taken into consideration during an appraisal by a good appraiser. However you must realize that the cost of an upgrade does not equal the increased value of a home. For example, adding a $20,000 pool will not add $20,000 to the home's valuation. Also, you don't want to upgrade too much beyond what is normal for the neighborhood, because it will not bear out in an appraisal. As far as new paint, new appliances, new carpet - NO, the house came with all that when it was new and it is expected to be there when resold, otherwise you will deduct from the value. Even adding sq. footage will increase value only to the point that the house is not out of line with neighboring houses. Other than all that, comps and sq. footage is important. Do not confuse upgrading with maintenance.

Answer 3

The simple answer is yes, upgrades are considered. The complicated part of the answer is how they are applied to the value consideration. Appraisers look a comparable sales to help determine a value for your property. A comparable is a nearby property that is most similar to yours in the most amount of ways - including upgrades. An upgraded house will always sell for more than an average house. If not, then why bother with the expense? That's just common sense. Your Realtor may have had a bad experience with a bad appraiser.

By the way, Realtors are not required to take any appraisal courses to get their license. And appraisers are not required to take any Realtor courses. The moral of the story is, ask the right person the right question.

Answer 4

Your both right. The Realtor is correct in saying that the comps are what the appraiser will look at but if you have an updated bathroom or kitchen it can raise the value of your home compared to similar homes in your area. The appraiser will look for homes with similar features. The upgrades you mentioned will make the house more attractive to potential buyers. Ultimately, it's the buyers who really decide what the house is worth to them by how much they offer for it.

Answer 5

Your realtor is correct. Paint doesn't mean anything. The only upgrades that effect an appraisal are additional buildings (not a shed) and a pool.

The rest of it, appliances, flooring, etc makes you house more sell-able but does not raise the appraisal price.

Answer 6

Your realtor is an idiot. Get a new one.

What could he possibly be thinking? Obviously, upgrades and amenities like hardwood floors and granite countertops play a part in the market value of your home.

This guy should have his license revoked for incompetence. Seriously, that's scary.