What your home is really worth

  @Money August 9, 2012: 9:36 AM ET
hoa08 think appraiser

Think like an appraiser and figure out your home's true value.

NEW YORK (Money Magazine)

When it comes to assessing a home's value, real estate agents and homeowners tend to be an optimistic bunch.

In the post-bust world, appraisers are a different story. They have to predict a realistic value for your home that the bank can use to extend credit to a borrower -- and that number can make or break your sale or refinance.

Appraisers say the following five areas are where homeowners often misjudge the worth of their abode.

1. The outside

The appraiser sees: Overgrown bushes and chipped paint.

What he does: Slices as much as 3% off the value of an average-size home.

Why: Curb appeal is primo. And an unkempt yard is a sign that there may be other issues.

"A good-looking lawn and bushes imply that you also take care of the internal systems in the house," says Jonathan Miller, president and CEO of a New York City-based appraisal firm that works throughout the tri-state area.

Moreover, the more meticulous your neighbors are about grooming, the more your appraiser will downgrade the value of your home.

"If a lot of the nearby properties are professionally maintained, the one that sticks out like a sore thumb will get a harder adjustment than in a subdivision where there's more variation," says San Diego appraiser Armando Ortiz.

2. Basic systems

The appraiser sees: A brand-new roof.

What he does: Nothing.

Why: Just as a knee replacement won't make you look 20 years younger, a new roof, furnace, or boiler isn't considered an improvement to your home.

That said, if your roof is in disrepair, replace it: Signs of leaks or discoloration can knock a significant amount off the home's value.

Related: Become a millionaire real estate mogul

"When people buy a home, they expect the roof to be working," says Columbus appraiser Mike Armentrout. "So while a new one isn't an added feature, it will help your chances of a sale."

3. The basement

The appraiser sees: A recently finished basement with a half bath.

What he does: Adds about 2% to the value of the home.

Why: Yes, your finished basement adds value -- but don't expect it to count like first-floor space.

The addition of a bedroom and quarter bath on the ground floor could increase your home's value by up to 20%, especially if you've got only one other bathroom.

"A below-ground basement normally isn't included in the square footage of the house," says Miller.

The same rule applies to outbuildings like a pool-house casita, painting shed, or studio.

4. The market

The appraiser hears: Two nearby homes just went into contract above their asking prices.

What he does: Nothing.

Why: While a broker might pump up a home's asking price based on the sense that the market is "hot," by and large, appraisers are bound by the data of recent comparable sales.

Related: Why renting a home might be wiser

What if prices are suddenly up in your area, and you're nervous that your house won't appraise for contract price? In that case, you might want to delay your appraisal until one of those recently contracted sales closes.

5. A remodel

The appraiser sees: An expensive, custom-made, built-in entertainment center.

What he does: Makes a negative adjustment to the valuation.

Why: "Cost doesn't equal value," says Miller.

Renovations that are at all trendy -- or not in keeping with the historical period of the home -- will be assessed at the cost of ripping them out.

Timeless improvements, on the other hand, such as a deep sink or new wooden cabinets in the kitchen, will add value.

So if you're thinking of remodeling, ask a local real estate agent to tell you what's on the wish list of today's buyers.

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