Charleston, SC Posts


A Lender’s Appraisal Does Not Care About Your Upgrades

It's a shame when a seller puts so much into a house and then doesn't get credit for it.  Tony Grego's post says it best though.  While there are some upgrades that do count, there are some things that need to be done prior to listing your home that will not.  Don't don't read this to mean, they should not be done. Items like painting and landscaping are necessary for buyers because they want to move into something that doesn't need work.  But sellers should carefully consider where to put there money prior to overupgrading.  Consult a realtor with your upgrade questions.

Do you feel that pricing a home is a little like throwing darts these days? Sometimes you hit, most times you miss?

At the end of the day Realtors have a next to impossible job trying to help clients price their home. I don't think I ever met anyone that wants to lose money but most homes we price today should reflect a lower price than a few years ago. Now I'm on the mortgage side of things but I hear the same things. My house is worth XXX,XXX due to:

"I have nicer landscaping."

"I just replaced the carpets."

"I just repainted the walls."

"I just had the bathroom toilet fixed."

"I had my furnace replaced last year."

Realtors work very hard with comparables, pictures and stats to help support the price. I'm not saying that these upgrades are not important. They just don't really add value. They add eye and curb appeal to help a potential client say yes to the listing.

What goes into a Lender's Appraisal?

For Fannie Mae, Click here

For Freddie Mac, Click here

For FHA, Click here

Most homes are financed. So these appraisal standards are important when you price. Remember we are in a Lender's Market. Nothing will turn a buyer off more than working hard on a price agreement only to find out the appraisal comes in short. So to best serve our clients remember that most of the weight for your pricing strategy must be Lender comps.


At your service,
Tony Grego
Senior Mortgage Banker  American Bank - Indianapolis, IN Branch to learn more about me

317-348-0280 direct line
317-536-3754 fax
"Bankers with vision, helping people with dreams!"

Michele Reneau, ABR, GRI, CRS

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Comment balloon 4 commentsMichele Reneau • March 03 2010 07:26AM


You have to do the items, upgrades your particular market will reward, support. There are diminishing returns and often the updated kitchen (gag) is not as nice as the one that was there, paid for. I have seen homes where one or two rooms, areas have been beefed up beyond the call of duty, money runs out. And then the rest of the house crying for the same attention is out of harmony and stands out as even worse in contrast.

Posted by Andrew Mooers | 207.532.6573, Northern Maine Real Estate-Aroostook County Broker (MOOERS REALTY) over 9 years ago

Good judgment goes a long way when attempting to update your home and/or prepare it for sale.  Most sellers don't get this concept.

Posted by Vickie Osoria (Keller Williams Realty) over 9 years ago

Michele, the items mentioned above are things the buyer expects - not anything they will pay more money for. Huge difference and sellers need to understand that. Great post!

Posted by Anthea Click, Nashville Home Stager - Selling Nashville, TN homes quickly! (Fresh Perspectives - over 9 years ago

Well said, there are many upgrades, primarily cosmetic that do not contibute to appraisal value

Posted by Karen Kruschka, - "My Experience Isn't Expensive - It's PRICELESS" (RE/MAX Executives) over 9 years ago

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