Feeling undervalued sucks!  It can make you mad.  You feel bewildered.  You’re sad.  I feel safe in saying it happens to us all at some point (or maybe that’s just me hoping I am not alone on this one).  What can you do about it?  One option is to find a new job, a new client, a new relationship, or new friend, and hope that this time it will be different.  Or you could sit idly by and hope the situation magically changes itself.  OR you could take action…3 proven steps to maximize your worth.

Full disclosure time.  I’m a financial consultant.  This is an article about optimizing cash flow.  This is about asset appraisals.  Wait………What?!?  Not interested?  Doesn’t apply to you?  Are you sure?  Even if you think you won’t ever need to refinance your house, sell a car, or insure a piece of jewelry, you might still pick up some personally valuable tips in the five minutes it takes you to finish this post.  Let’s see.

Value is a perception.  It is subjective.  It is relative.  More.  Less.  Better.  Worse.  Appraisers are licensed professionals who follow a set of rules to opine on an asset’s value.  Some of the parameters are black and white.  Many are gray.

The value assigned to your asset will be determined by someone other than you – and typically in comparison to similar assets in the marketplace.  That value will dictate how much money you can borrow, the trade-in value of your car, the insured value of your great-grandmother’s diamond ring.  You can sit idly by and hope the value is fair (and then be mad, bewildered, and sad if it’s not), or you can take action.  In many instances, you will have only one shot at this.  Appraisers are not going to change their valuation because you don’t like it.  Rebuttals are a hard sell.  Be helpful from the beginning.  It is only three steps.

1. Educate Yourself. Understand how your asset’s worth will be measured.  The end product of the appraisal process is a detailed appraisal report that shows how the value of your asset was derived.  Find the last one you received and read it again.  If you don’t have one, ask a friend or get a sample off the internet.  It won’t be riveting reading, but you will learn what information is important and how it is used in a valuation.
2. Make a Good Impression. Cut the grass.  Clean the pool.  Tidy up the house.  Wax the car.  Make that diamond sparkle.  “Condition” of the asset is one of several factors that impacts its appraised value.  This is one of those gray areas.  Maybe a little mess or some dirt won’t matter.    I can’t say for sure that clean and tidy and shiny will result in a higher value, but I am pretty sure it won’t result in a lower one.
3. Participate in the Process. Here is where you take what you learned in step one above, combine it with all you know about your asset, and make yourself useful.  Put together a package of pertinent information for the appraiser.  Don’t worry, it doesn’t need to look like the September issue of Vogue.  In many instances, one legible page will be sufficient.  If your asset has a culturally or historically significant back story, now is the time to tell it.  Ever seen Antique Roadshow?  No?  How about the story where Paul Newman’s Rolex sold for $17.75 million?  That is an extreme and rare example, but if you know of something that makes your asset special, provide the information.

For Homeowners – Appraisers rely on information they can find in public records, but they also take other facts into consideration.

1. Provide a list of all improvements you have made to the house and property. Include the upgrade, cost, date, and explanation of any valuable benefits (i.e., installation of new windows or insulation that cut energy costs by 30%).
2. If you know of recent home sales in your neighborhood and the story behind them, give the address and the details. Did a house sell at a bargain price to get a quick close because of a divorce or job relocation?
3. If you live in an amenity-rich neighborhood, make sure you point that out, as it adds value to your home.

For Real Estate Developers / Homebuilders – Your appraisal packages are going to be more complicated, but they also have the potential for greater impact.

1. If you own undeveloped land, someone in your organization will be familiar with recent “comparable” transactions and their details. Get their input.  Fully support your case for all favorable comparisons:  location, approvals for number and type of units, density, site conditions, assumption of debt obligations, special financing, etc.
2. If you own land under development, the appraiser will also utilize other methods. For the discounted cash flow method, focus on the three most impactful line items – unit price, unit cost, and sales pace.  In the absence of data from you, the appraiser will use information from your local market.  If your monthly sales are 8, but the area average is 4, make your case.
3. Those of you in the real estate business know there are many more options to explore – too many for this article. If you’d like, I am happy to continue the discussion with you.

If you hung on until the end to see if there really was something personally valuable, here goes…

Do you want to be more highly valued at work?  Be a better partner?  A better friend?

1. Educate yourself. What value are others looking for in you?  Is that the value you choose to give?
2. Make a good impression. Present your best self.  At all times.
3. Participate in the process.  Don’t sit idly by and hope someone values you fairly.  Rebuttals are a hard sell.  Help them see your true value from the beginning.

Thank you for reading.  Feel free to share!