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To you, this house is worth say $200k. It’s perfect. Just off the highway, easy commute, you love the color purple, and you think overgrown ivy is charming. You are willing to pay 200k for it – so it must be worth that right?

Not so much. The truth of the matter is that lenders have to be sure the property is worth just as much to the next person, and the next, as it is to you. This way, if you for some reason can’t repay the loan – the house is actually worth enough for the lender to get the loan amount out of by selling it to the next person.

In comes the appraiser. The appraiser figures out what the market (aka all the possible buyers) believe your house is worth – and the lender goes with the appraiser’s report. You love them when they tell you your house is still worth $200k, or even better, that it’s now worth $250k. But the downside is – it could also be worth $100k now.

How Can I Make My House Worth More Then?

Well, part of it is outside your control unfortunately. When there are a lot of houses on the market and not enough buyers, the value goes down. If all purple houses are cheap right now, then chances are yours is too. On the other hand, if purple houses by highways become popular for some reason and yours is one of the last original ones standing – the value goes up.

Beyond market conditions, there are a few things you can do to make the value of your home higher. Home improvements such as additions, renovations, and installations can make your home more attractive to the next buyer. The more attractive it is to other buyers – the higher the value of your home.

So yes – Add that new bathroom, porch, deck, whatever. As long as it’s not extreme and actually looks like an improvement – you just increased the value of your home. But beware, adding a clown theme park to your front lawn will probably not only annoy the neighbors, but also lower your property value — so make sure improvements are appropriate and suitable.

What if I Just Know My House is worth $200k and Not What the Appraiser Said?

If you’re absolutely sure the appraiser has made an error (after considering market conditions) and that your home is probably worth more, then consider another appraisal, but beware you’ll have to pay for the second one as well. Another option (but keep in mind this is not an official way to determine value and is never as comprehensive as an appraisal) is to go to Google Real Estate, to see what all your neighbors are selling their homes for. This way, you can gauge the market before paying for another appraisal.

Regardless, appraisals are a necessary part of the real estate transaction, and market conditions are complex and out of any single person’s control. The bottom line – don’t assume you should blame your appraiser. Maybe throw away your voodoo doll and repaint the house instead.

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