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Tips For Increasing Your Appraisal Value: An Interview with Legare Duke of Port City Appraisals

By Legare Duke

Tell us a little bit about your company and its foundation.

I have been working in the Charleston area as a residential real estate appraiser for over 15 years. In 2005, I founded our company Port City Appraisals, which serves the entire Charleston Tri-County area. We offer a wide array of residential appraisal services, including appraisals for single family home appraisals, FHA, construction, building permits, PMI reduction, REO, divorce and estate.

What are some of the services your company provides?

Port City Appraisals' niche in the appraisal industry is providing top quality private appraisals with an emphasis on fair and unbiased work. Private appraisals are ordered by an individual (typically not from an institution such as a bank or mortgage company) and not intended for use in a mortgage transaction. Examples of private appraisals include:

- Probate or estate appraisals.
- Divorce appraisals including mediation work.
- Pre-listing appraisals for homeowners considering selling their home or even refinancing.
- Purchase transaction appraisals (cash sales or second opinions).
- Gift tax appraisals to satisfy IRS appraisal requirements to estimate tax liability.

Private appraisals can be much more challenging than "form filler" mortgage finance work. Therefore, it is important that you carefully choose an appraisal firm familiar with the complexities involved when performing private appraisal assignments. Not every real estate appraiser is well educated with IRS tax codes and relevant tax forms, for instance, if you need an appraisal for gift or estate tax, living trust or capital gains tax. Port City Appraisals is proud to provide expertise in those areas.

As an appraiser, what are the big influential areas you look to when deciding a home's worth?

Every homeowner wants to know how to increase the value of his or her home. Unfortunately, there are a lot of inaccurate ideas about what makes a home easy to sell versus what actually increases the appraised value of the home. There is a huge difference between the two. As appraisers, we are forced to concentrate on factors that determine the value of the home only; aesthetic qualities are often not relevant to the appraised value.

So how do you know what increases the appraised value of your home? Here are some of the most important factors to determine a home's market value:

Location, Location, Location: Where the home is located geographically is crucial. For an appraisal, determining the immediate market area is the most important task when performing a sales comparison approach. Appraisers have to figure out which homes would compete directly with your home if it were listed for sale. Appraisers choose comparable sales based on the principle of substitution. Plainly said, a true comparable sale is one in which the buyers would have considered purchasing your home as a replacement for the home they purchased.

Physical Attributes: How does your home compare to others in terms of quality, condition, age, style, or size.

External Factors: View, proximity to potential nuisances (railroad, busy roads, etc.), or available amenities. Waterfront lots may be valued more than wooded lots, for instance. Wooded lots, more than likely, would be considered more valuable than lots bordered by a busy intersection.

How important are the little things to you (e.g. trimming of the lawn, having a clean house) when it comes to assessing the value of a home?

Aesthetics: While yard maintenance, interior decorating and cleanliness are very important when selling a home, these items only play a minor role in home valuation. These aesthetics impact the curb appeal of your home (what attracts buyers initially) but are difficult to determine what dollar amount they may add to the value of your home. Appraisers are more concerned with structural issues than with cleanliness. An untidy or messy home is little concern for an appraiser. However, a home with deferred maintenance (stained carpet, damaged sheetrock, missing roof shingles, etc.) could be a liability when estimating market value.

Do you have any advice for someone who is looking to persuade you, as a home appraiser, that their house is actually worth more than it may appear?

A homeowner always knows his or her home best. It's important that opinions be expressed during an appraisal. Make sure that you tell the appraiser everything you feel is relevant. If you know of a home in the neighborhood that may have sold under unusual circumstances, make sure to tell the appraiser. Appraisers are human and can't know everything. Make sure to fill in the blanks if you possibly have information that the appraisers are not aware of.

How much research about the neighborhood do you do prior to the home appraisal?

Prior to performing an appraisal I always check, at a minimum, the 12 month sales history for that particular neighborhood. Other necessary market data includes a trend analysis (typical days on the market for sold properties, number of distressed sales, list to sale ratios, price trends, etc.). If the neighborhood is a PUD (planned development with mandatory HOA dues) it is important to verify the available amenities, HOA dues, and unusual covenants/restrictions. In addition to viewing the subject property it also is essential for an appraiser to view the neighborhood (view the comparables and other relevant external factors that may exist within the neighborhood).

How important is the neighborhood when it comes to valuing a home?

As stated earlier, the neighborhood is extremely important when valuing a home. People choose neighborhoods they want to live in long before they choose a specific home. You can change or modify a home to your liking but you can't change a neighborhood.

Where are some areas that if the homeowner just took some time to fix up it would drastically improve their home value?

There are no sure fire ways to increase the value of your home. However, the most common types of improvements that seem to enhance the marketability of a home are updates to kitchens and bathrooms. But, because there is no guarantee that you will recoup the cost of the updates or renovations, keep them simple. Upgrades of linoleum floors to tile or hardwood, or formica countertops to an inexpensive granite are good examples. Replacement of old appliances can sometimes be useful as well. Be careful not to make improvements just for the sake of doing so. If high-end upgrades are not typical for the area then it is unlikely that prospective buyers will want to absorb the additional cost. However, if granite counters and stainless appliances are the norm for your area, it is likely that buyers will target homes with those types of upgrades.

I always recommend making sure a home is in "move in" condition. Fix or repair items that require immediate attention, like leaks, holes in walls, etc. If the carpet can be cleaned I would suggest doing so rather than replacing. Since individual decorating tastes vary widely, it's impossible to know what potential buyers intend to do when they move in. They may not like the type of carpet you installed, or may want to put down hardwood flooring. They might hate the color scheme you chose to repaint the interior of the home, or they may detest wallpaper. Again, keep it simple.

If the home is extremely dated (ie. kitchen or bathrooms have not been updated since the 50's) you may want to consider simple updates that are typical for your neighborhood. The important thing to remember is to not over-improve the home.

What is the best way for people to get in contact with you or your company?

If you have appraisal related questions or need the services of an appraiser please do not hesitate to contact me.

Legare "Lee" Duke
Port City Appraisals
Office: 843.224.3586
Lee@portcityappraisals.com
www.portcityappraisal.com

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About The Author

Legare is the President of Port City Appraisals. He has a BS in finance from Clemson...

Phone: 843.224.3586

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