For a potential buyer, the kitchen is often the most important room in the house. A well-appointed and attractive kitchen can help overcome numerous other flaws and deficiencies, whereas an otherwise great house that has an unattractive, outdated, or inadequate kitchen will be difficult to sell. Despite this, some appraisers don’t spend a great deal of time looking at the kitchen. Furthermore, there’s not a lot of room on the URAR form set aside to describe the kitchen. To help make your job a little easier, here are some quick tips for appraising kitchens.
1. Realize that size matters
The size of the kitchen is important, and it is something that is difficult to change. The trend in today’s market is for large, eat-in kitchens with island cooktops and/or eating areas. Houses with small, cramped kitchens are difficult to sell.
2. Assess the cabinets
The quantity and quality of cabinets are both important in a kitchen appraisal. You can tell a lot about the cabinets by opening doors and drawers. Are the cabinets solid wood or laminate? Do the doors and drawers have a “soft close” feature?
There are three types of kitchen cabinets that are used in houses: stock or “builder-grade,” semi-custom, and custom. There is nothing wrong with stock cabinets, if the kitchen is properly designed and the cabinets are installed properly.
A growing trend is the use of glass cabinet doors which allows the owner to display collectible dishes, glassware, etc. Another trend, particularly in rustic or farmhouse-type houses, is to install open shelving instead of wall cabinets in the kitchen. Tastes change, and it remains to be seen whether these houses will suffer from functional obsolescence as they age.
3. Note the material of the countertops
Countertops are also important when it comes to appraising kitchens. Laminate countertops were the most common type of countertop in both remodeling and new construction until the 1990s. Since then, granite countertops have become more and more affordable and mainstream—appearing even in modest houses. Quartz and concrete countertops are also growing in popularity, and the cost is becoming increasingly competitive with granite.
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3. Make a checklist for all kitchen features
As an appraiser, you need to carefully look at the features of the kitchen in the subject property and take good notes and photographs. Consider creating a brief checklist for use in rating a kitchen. Are the countertops granite, quartz, ceramic, or a laminate surface like Formica? Is there a backsplash? Are there any special features like pot fillers, “touch” faucets, separate beverage refrigerators, or instant hot water dispensers? Are the appliances built-in or free-standing? What is their quality and condition?
4. Note that not every house needs a modern kitchen
Don’t get carried away and think that every kitchen needs to have the latest and greatest of everything. The subject’s kitchen should be judged and valued in the context of the expectations of typical buyers for the subject property in the local market. In the lower price points, for example, a dated kitchen might not be a problem as long as it is functional and in average or better condition.
Appraisers interpret the market; they don’t make the market.
5. Understand what creates value in your local market
Appraisers do not need to be kitchen design experts, but they do need to understand what creates value in their market. Make sure you know which features buyers in your local market are willing to pay for, and which features they are not willing to pay for.
Television networks like HGTV or DIY feature shows can provide appraisers with information about trends in remodeling, particularly kitchens and baths. However, these shows are intended for a national (or international) target audience, and may or may not accurately reflect what is going on in your local market. The same thing is true for national magazines and many websites.
When it comes to appraising kitchens (and all other areas of a house), there is no substitute for local market knowledge. Get out and go through some new construction model houses, if they exist in your market. Talk to real estate agents and contractors when you get the chance.
6. Don’t get carried away with national remodeling trends
Don’t get carried away with the trends you see on television shows or read about in national publications. Not all of these trends make it into all markets and price ranges. For example, an appraiser might charge functional obsolescence to a house that has a small kitchen simply because every buyer on HGTV’s Love It or List It wants a large open kitchen. However, that action by the appraiser might not accurately reflect the reaction of a typical buyer to that feature in the local market.
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