2019 Idaho Real Estate Blog

The Real Story Behind The Appraisal Main Boise Home Loans
So, what the heck goes into determining the value on a home appraisal? Maybe you're thinking to yourself, "Why didn't those new cabinets I installed add any value to my home?" Well, look no further...your answers are waiting here!



Dear visitor:


When purchasing or refinancing a home, the appraisal is one of the more confusing pieces of the loan transaction puzzle.  I have literally had hundreds of clients and prospects who come to me thinking their house is worth a higher amount than the appraisal indicates, so this appraised value rarely makes sense to them!


First of all, it is important to understand that your appraiser is completely independent from lenders, Real Estate Agents, sellers, etc.  All appraisers must act in accordance with guidelines that are set by the Uniform Standards of Professional Appraisal Practice (USPAP).  These guidelines help appraisers put a fair market value on homes, and they are based on comparable sales in the same area.


Let's talk about some common examples homeowners ask me about.  There is no specified dollar amount attached to a home with a pool, spa, bathroom upgrades, or a home with a great view.  A homeowner very easily could install a custom pool that cost them $40,000, but if the local market only supports a value of $20,000, then that item will be valued at $20,000 on the appraisal.  With older homes, costs of remodeling are rarely reflected in the appraisal.  This is usually due to the fact that around 1/4 to 1/3 of the projects remodeling costs are associated with demolition and fixing of the surprise issues (plumbing replacement or updating wiring).  Watching episodes on TV of Flip That House can be intoxicating when you see how much money can be careful!


When all is said and done, the value of these upgrades, whatever they may be, must come from comparables in the same market, and must come from current market pricing, generally within the last six months.  Comparable values are also derived from homes that have actually closed and sold, not those that have just been listed for sale.


Should you desire more information on this subject, feel free to contact me, or any of the other loan professionals, at Millennium Mortgage & Insurance, Inc. in Nampa.  Our office number is (208) 880-0316, or you can locate us on the web at




Eric Leigh , Senior Loan Officer

Millennium Mortgage & Insurance, Inc.

Posted by Eric Leigh at 5/8/2007 4:42:00 PM
Comments (3)
Re:The Real Story Behind The Appraisal
What about the value judgement in new subs ? We added upgrades in our home far above the builder spec homes . How does our 2300 sqft homes compare at time of sale when we know it is better on the inside than the other houses in the sub of thesame size ? David Dennis
Posted by on 5/12/2007 5:45 AM
Re:The Real Story Behind The Appraisal
Hi David,

Depending on what upgrades you added, they might add value...but really, the value added depends on what is in demand in the local market. If, for instance, you have added hard-wood floors in your home, where the other homes in the sub have only laminate flooring, then you would probably gain value. However, a tiled back patio may not add any value on the appraisal.

I would recommend that you contact an appraiser with your questions and let him/her know what specific upgrades you have made, and see if they can help you to answer those questions. If you would like a referral to a realtor, please give me a call. Our company's contact information is located at


Posted by Eric Leigh on 5/12/2007 10:42 AM
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