5 Things Your Birmingham, AL Appraiser Wishes You Knew

5 Things Your Birmingham, AL Appraiser Wishes You Knew

Homeowners and agents are starting to understand more about the appraisal process due in part to appraisal blogs like my own as well asYour appraiser is a source of valuable information the reporting done by the mainstream media in recent years. With the changes going on in the real estate market many are focused on the appraisal process and how their home’s value is being effected.

With my blog I have the opportunity to speak with agents and homeowners about what goes into appraising houses. Whenever I speak to agents at their offices to discuss the appraisal process much of what we do makes sense to them because I have taken the time to walk through the thought processes appraisers use.

Whenever I am at a client’s home during a pre-listing appraisal I will tell them how the appraiser views different types of living area or what types of improvements may add more value than others. Today I’m going to discuss 5 things your Birmingham, AL appraiser wishes you knew, but of course these concepts are applicable no matter where you live.


Cost does not equal value

One of the most common topics that a homeowner will discuss with me when I’m appraising their home is how much they have spent on different improvements to their home. I’m a homeowner too and I totally understand that no one wants to invest money in improvements and not get it back through an increase in their home’s value, but there are limits. If you spend more money on improvements than what is typical for the area there is a high probability that you will lose money.

My advice to homeowners is to know what is typical for their area and don’t go beyond that. For example if you live in a $150,000 home you do not want to invest $50,000 in a kitchen renovation. This may work in a neighborhood with homes that are worth $400,000 or more but not in the other one. You must know your neighborhood to make informed decisions.

One example I’d like to leave you with is from a blog post by Ryan Lundquist. Ryan discusses homes that have popcorn ceilings and whether you should remove it to sell your home. You can read the full post but the short story is that even though the popcorn ceiling is a style that was used many years ago you may not want to worry about removing it. There are other improvements that a buyer is more interested in seeing than to have the popcorn removed. The way he discovered this was by looking at what improvements other recent sales in the neighborhood had. It turns out that while many of the sales had updated kitchens and bathrooms they still had the popcorn ceiling. It would be more worthwhile to spend money on the improvements that matter compared to the ones that will not give you a return back on the cost to have them done.

A pre-listing appraisal is an excellent investment

Would you pay $400 to save $1,000? Several years ago the National Association of Realtors reported that the average mortgage payment across the country was approximately $1,000. It’s also a well known fact that one of the biggest reasons that a house will not sell is that it is overpriced. If your home was priced to sell based on the opinion of value arrived at through a pre-listing appraisal, which costs an average of $400,  you will most likely sell it faster. If you sold it 30 days sooner, and your payment was $1,000, then the return on your investment of $400 for the pre-listing appraisal would be well worth it. If it took longer to sell an overpriced home then the appraisal cost would save you even more money in mortgage payments not to mention marketing costs to the real estate agent.

A pre-listing appraisal can put your home at an advantage in a highly competitive market. Many sellers overprice their home because they have allowed their emotions to get involved and priced their home too high. The appraisal can give potential buyers peace of mind because they know that there will be a lower probability of value issues when the mortgage appraisal is ordered. If you need more information on this type of appraisal feel free to contact me.

What updates and renovations have you made to your home

The appraiser’s job is to collect as much information about the house they are appraising and I’ll bet most appraisers would like for owners to  know that having a complete list of improvements made to the home over the past 10 years can help them in their job. Appraisers are trained to be excellent observers, however it is also helpful to know about things that may not be readily observable.

If you have replaced a heating and cooling system or roof shingles then this information should be provided to the appraiser. In addition, if you have the costs of these improvements available then this could be provided as well. Keep in mind the point I made previously about cost and value. Knowing the costs can help the appraiser understand the quality of improvements you made and this may impact its appraisal value.

Appraisers are the only “non-biased” parties to a real estate transaction

Appraisers get blamed a lot for killing deals but to be honest there is nothing beneficial to us in low balling appraisals. It is the exact opposite, because appraisers usually face more inconvenience when an appraisal comes in low.

Appraisers are the only party to the real estate transaction that is not biased one way or another. The seller and their agent would like the home to sell for as high as possible because this will mean more money to the seller and a higher commission to their agent. The buyer would like for the home to be priced as low as possible so they will not have to spend as much. It is the appraiser who acts as a disinterested third party, and whose fee is not based on what the home sells for. Appraisers risk their livelihood if they compromise their integrity therefore their major concern is to provide the most accurate and supportable value.

All square footage is not the same

From an appraisal perspective all livable areas do not contribute the same value. The majority of value comes from the above grade heated and cooled living area. Above grade living area is the area that has no part that is below ground level and includes the first floor and all floors above it.

Areas that contribute to value to a lesser degree includes basement area, or that area that is below the ground, as well as heated and cooled areas that are separate from the main residence. Examples of this might include an apartment over a detached garage or a room that you get to by passing through and unfinished area or by going outside of the residence to enter through another door. All of these areas add to the overall value of the home but to different degrees.


Appraisers do not get many opportunities to explain these common issues to agents or homeowners so it’s important to pass along this information whenever we can, and I choose to do it through my blog. Knowing how appraisers look at these various issues can help you to understand the appraisal process which in turn will help you to maximize your home’s value.


Do you have any other questions about things your appraiser wishes you knew? I’d like to get your take so let me know your thoughts. Thanks for reading.

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  1. Great list Tom. I wish users of appraisals understood that the appraisal is just an opinion of value based on evidence for a specific date in time and it is not a guarantee of a future sales price.

    • Great point Gary. When asked how long my appraisal is good for I like to tell people that realistically it’s good for the exact day and time I am at the property because it could burn down the next day.

  2. Nice job, Tom. It’s so true about the difference between cost and value. It’s very easy to fall into the mindset that cost always equals value too. For instance, $20,000 of improvements equals $20,000 in value. That’s a game we sellers tend to play. But what will typical buyers pay for the features in the resale market? That’s the key. By the way, a $1000 mortgage? That would be nice. 🙂

    Thanks for the mention too. I really appreciate that.

    • Thanks Ryan. Yes it is easy to fall into this mindset but it is one that I think many homeowners make. This is why I mention it often. I hear you with the $1,000 mortgage payment. 😉

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