Will appraisal be affected?

3 Replies

My wife and I have found a nice older home that the previous owner has done a sub par renovation on. We plan to do a complete remodel like we have in the past with success. The house has wood paneling throughout that we don’t rip out due to there being new interior doors and crown mounding already installed. I’ve talked with a drywall professional that has had success with filling in the cracks and making the paneling appear to be drywall. I would make it know when selling that it was paneling and not drywall. My question is how much will this affect the appraisal? Looking at around 7k to rip it all out and replace with drywall, plus 3-4 weeks of labor. Any advice? 3 bedroom 2 bath in north MS. Will sell around the 130k range.
@Matthew Fortune Really shouldn't affect the appraisal, if it's a good job. And, you certainly aren't planning to announce this fact to the appraiser. They are going to be looking at comps to value your property. What finishes are prevalent in the neighborhood? At that price point, I'd want to do enough to get good ARB value, while ensuring I don't over-improve for the market. You definitely want it to move quickly.
@Matthew Fortune It's a really fine line we have to walk. Not flipping with the end buyer in mind means your flip will sit on the market too long. Not considering the appraisal means your end buyers can't get financing. My suggestion is always to visit as many open houses and/or listed properties in the are of your flip as possible. See exactly what you're competing with and what is expected at your price point. That's basically what an appraiser is looking at. Also, if you're mostly working in a relatively small area, get all the sold data done the last 3 to 6 months. If you have access to the actual MLS listings all the better, because you'll get pictures and sold price. Once you have the information, do a feature (big items) by feature comparison of the properties and break down the price per square ft. Using this information you should be able to determine things like how much an extra bedroom or bathroom is worth in very specific areas. You will also have in your back pocket the avg proce per sq ft for very specific areas. Those things are all important factors in your appraisal, much more so than finishes, until you start getting into the (my opinion) $250k and above range.