You may have heard that you can’t have opinions about the color of a room or shaggy carpet as you’re doing your job and walking through homes… that’s dead wrong. If orange shag carpet can make a difference in value and you can support that in the marketplace, you not only can, but you have an obligation to reflect that in the final value. The same goes for whenever you have any other potential problem. There could be an issue with the trim, chipping, peeling paint, a tripping hazard, missing handrails, a sinkhole in the backyard, or anything else you can think of. The solution? You take a picture of it and reflect it on your report.
But what do you do with something you can’t take a picture of? Does the fact that you can’t take a picture of it change the fact that it might affect value? We’re talking about the things you can smell, from cigarette smoke to cat pee. There is a definitive ammonia from that terrible smell that you just can’t capture in a photograph or point to and say look, here it is. And yes, you may need to look into making some adjustments for a house that smells bad.
How do you know the adjustments to make? There are so many ways to go about this potential issue. You could interview. Call up your friendly neighborhood realtor and ask the question… “what’s your opinion? If you had two identical homes and one of them smelled like cat urine and one didn’t, how much would you need to discount that on a percentage basis in order to sell it?” Do this over and over until you have a strong sample. See what responses you get and adjust accordingly. Another approach is to do your own sales analysis. Realtors probably don’t want to note a bad cat urine smell in the listing papers. But you walk a lot of houses. Keep track of those that are for purchases and see what they sell for compared to others you have walked through that are better on the nose.
The fact that you may come across cat pee in a home is certainly something that affects you as a real estate appraiser professional performing an observation. If you’re alerted, it will alert the buyer. You are valuing this as if it were for sale. There may be times you are doing a desktop or a drive-by and may not get this detail, but if you do have the information, it is your obligation to report on how it affects the marketability and value of the home. It very well may not affect it, but then you must report on why. At the very least, there needs to be a note of potential repair needed. Changes might be slight, like changing the carpet in one room. Or they may be extensive, perhaps ripping out all the floorboards or tearing out drywall will be necessary. What will it cost the buyer? What will it cost the seller? Can you imagine the cost just to make it smell nice? As you address this need, it is up to you to support and report your findings for an accurate appraisal and an honest value of the home.
For more information on this subject, please download and listen to The Appraiser Coach Podcast Episode:
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Rumor has it that the new appraisal forms forms will have a drop down menu for smells. Appraisers could be tasked with accurately identifying specific stenches. The iPhone 19 will have a smell-ometer app, CE classes are in the works and State Boards are creating olfactory punitive statutes. The whole thing reeks of bureaucracy.
LOL Mark. If a house has a bad smell, I would be thinking about the cost to cure plus any entrepreneurial incentive. If the house is in poor condition and needs a full renovation in the eyes of the typical buyer, then the small might not change the value because it’s going to get fixed when all the finishes are replaced.
I have had issues with “smells” for years. One day, I solved the problem—Scratch and sniff pictures…..Now I only need that copyright process method. I figured when that is obtained, I can retire.
I dealt with it by making an adjustment for new carpeting/flooring without bringing up the smell issue directly by taking a photo of the soiled carpets with cat present, poop on the floors and the overflowing litter box. All in one photo.
I felt I didn’t have to mention that the room smelled.
We actually had a listing in our area where the agent advised everyone looking at the home about the Cat Smell up front. The house had been priced below the market to create allowance for repairs/stench removal.