One appraiser reports a driveway to be two cars in size. Another says the same driveway is six cars in size and another says the driveway is an eight-car driveway. They may all be correct! How so?
It really depends on how the appraiser is looking at it. Are they reporting the width of the driveway, the depth, or how many cars can fit on the driveway?
WHAT MOST APPRAISERS REFLECT
Most appraisers reflect the width of the driveway. Why? For one thing, many lenders prefer the driveway size to be reported this way. This is likely because it is less subjective. For instance, if the appraiser reports the driveway size based upon the number of cars that can fit on it, what kind of automobile are they using for their measurement? After all, a driveway may be able to accommodate a larger number of smaller cars than bigger ones.
Reporting the width of a driveway may still be a little subjective, but clearly not as much as the other options. If the appraiser is reporting the width, this can lead to other questions. For instance, some driveways may begin at the street as two cars wide, and then widen out near the garage to accommodate access to a wider garage. This is up to the appraiser to report and explain if necessary.
Typically, I report the width of the driveway where it begins at the street. Some may report the size differently. If the widening of the driveway adds value, that can all be explained in the report.
DOES DRIVEWAY SIZE IMPACT VALUE?
As is the case with nearly every aspect of a home, the answer is, it depends.
For instance, in high-density neighborhoods where street parking is limited, the size of the driveway could make a difference in value. On the other hand, in other high-density neighborhoods, many homeowners may use public transportation. If this is the norm for the neighborhood, the size of the driveway may not have any impact on value.
It really depends on the neighborhood and what the typical buyer in that neighborhood is looking for. I find that often, driveway size does not have any major impact on market value, as long as the driveway is typical for the neighborhood.
DOES THE MATERIAL THE DRIVEWAY IS MADE OF MAKE A DIFFERENCE IN VALUE?
I bet you know the answer to that question. It depends! In some neighborhoods, it does. Again, it all depends on what is common for the neighborhood and other similar homes.
In some neighborhoods, especially in newer developments where most driveways are concrete, having an asphalt driveway may be less appealing to buyers because it stands out. When an aspect of a home does not conform with other homes, that can have a negative impact on value.
What about gravel or tar & chip driveways? It depends on the area and the type of home, and what buyers expect. I wouldn’t assume that having a gravel driveway is automatically a negative aspect. Gravel driveways can be beautiful! Here is a video with some awesome gravel driveways.
In rural areas, it may make little if any difference in value. It may also depend on the climate. In colder weather climates, where snow is common in the winter, it can be more difficult to plow a gravel or tar & chip driveway compared to a concrete or asphalt driveway. And concrete and asphalt driveways are clearly easier to shoe-skate on. Hey, that may add value for some buyers, or at least their children.
As I mentioned earlier, it depends on what buyers expect for homes that are similar. For instance, buyers who are interested in a very large home that offers many upgrades, buyers may expect the driveway to be concrete, asphalt, or some other solid surface. On the other hand, buyers looking for a modest-sized home, like a small log cabin on acreage, may not expect a driveway with a solid surface.
How do appraisers determine whether differences in driveways have an impact on market value? The best way is by finding similar homes that have sold that have similar driveways. We may have to go back in time a little to find a comparable home, especially if the driveway of the home we are appraising is unique.
It would be a mistake to assume that the cost of installing a particular kind of driveway will always have a return on value.
If we have questions about what buyers expect, it is good to interview real estate agents who are familiar buyers in that area to see if they’ve noticed buyers’ reactions to differences in driveways. After all, they regularly converse with buyers and sellers more than appraisers do. They usually hear if a type of driveway is a turn-off to buyers. Tapping into real estate agents’ views can be incredibly helpful to appraisers and the public. I recommend visiting with several to get a better picture of what buyers are thinking.
OVER-IMPROVING DRIVEWAYS
If not careful, it can be easy to over-improve a driveway. They can be expensive, and the return on the investment is usually not dollar for dollar. Especially when the driveway is very large. However, a homeowner may decide to make the improvement anyway, despite it having a relatively poor return on value because it will make their life easier. And a beautiful driveway can have a big impact on curb appeal, which can have an impact on market value!
Speaking of fancy driveways, check out this video with some beautiful driveways!
You probably never thought you would be reading an article on driveways. Well, check that one off your bucket list. (I just did) I hope you enjoyed this article.
I know many will be taking some time off to visit with family and friends over the next month. Enjoy some well-deserved time off with your friends and family. May all the driveways you travel on be dry!
Thanks, as always, for reading my articles! If you would like to listen to my articles instead, check out my Cleveland Appraisal Blog Audio version.
Have a great weekend ahead!
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Here are some links to other articles I’ve enjoyed recently! I hope you will also…
Housing A Reversal In Direction – Housing Notes by Jonathan Miller
Buckle up for next year’s housing market – Sacramento Appraisal Blog
Truth and Honesty – by Earl Nightingale #306 – The Brian Buffini Show (PODCAST)
Should You Turst An Algorithm For Your Home’s Value? – Birmingham Appraisal Blog
Market Slowing? Not So Fast! November Newsletter – DW Slater Company Blog
Fannie Requiring Appraisal Floor Plans Coming? – APPRAISAL TODAY
Do You Check Appliances During the Appraisal Inspection? – The Appraisal Update with Bryan Reynolds(PODCAST)
Getting to ‘No’ You – The Real Value Podcast
Ne Sketching Technology for Appraisers – The Appraiser Coach Podcast with Dustin Harris
But Are They Market Value? – The Appraiser’s Advocate (PODCAST)
Is Appraisal Obsolete? – George Dell’s Analogue Blog
I think you’re right about appraisers labeling this differently. I suppose some appraisers might be adamant that there is only one way to report this, but I don’t see it that way. I don’t really care to be honest. I think the key is we consider what is there. Regarding value, I’ve never heard of a buyer who said, “I only want to see homes with a paver stone driveway…” 🙂
Thanks Ryan! I completely agree with you! To me, it’s like any other aspect of a home, be it finished square footage, what is considered a bedroom, or anything else. We have to develop our opinions on how buyers (the market) are doing when it comes to these things. There are many ways to report home features in our reports. As long as we can support our reporting, all is good. I’m appraising a home this morning with a gravel driveway. I have comparable sales with concrete drives and some with gravel driveways. After I make all of my other adjustments, which were derived from that market, I see no value difference. But that may be different with another home in another area.
According to FHA guidelines, the width of the driveway at the curb cut should be reported. This has to do with ingress/egress and whether or not 1 car has to be moved for another to get out of or into the driveway. Do you tip the valet in your own driveway?
I have reviewed appraisals on a national level for more years than I care to count. As mentioned here, It all comes down to buyer actions. Problems arise when homeowners have had multiple appraisals done, for purchase, refi, HE, etc and there is a lack of consistency, between appraisers, in the reporting of driveway spaces. One says 6, one says 8 and another says 2 (to use your example) what about an RV or a boat? In most cases, driveway spaces is not value impactful but becomes a point of contention for a homeowner who then questions the appraiser’s credibility, “they can’t even count!”
Why don’t we remove the # of driveway spaces from the form? Is it really a meaningful data point? Who uses that data? Underwriters, GSE’s, borrowers? Nah. If it is meaningful, then it would need to be addressed in the comments where it should be. In densely populated urban areas in close proximity to public transportation, driveway space/commuter parking can be a source of monthly income. Obviously, reporting 2 spaces in the report in this scenario doesn’t tell the reader much and needs commentary.
Place the issue squarely with the appraiser and take the # driveway spaces off the form.
Merry Christmas!
Big driveway, more snow removal, gravel – weeds, more Roundup and so it goes….
Hi Heywood! Thanks so much for writing in! I completely agree with you that inconsistent reporting leads to problems. Especially when such things are not adequately explained in the report.
Thanks also for mentioning FHA/HUD’s guidelines. They also have additional guidelines when it comes to driveways that appraisers should make themselves familiar with when performing FHA appraisals.
Truthfully, there have been times when I have wondered why the driveway size field is in many appraisal forms. However, over the years, I have come to appreciate that most of the fields in most appraisal reports are there because in some markets, features like driveways may impact market value. And since the reports are used nationwide, in many different markets, while some aspects of a home may not make a difference on value, in other areas it may.
That being said, if there was no driveway size to report, and driveway size did make a difference, the appraiser would hopefully recognize this and appraise the property accordingly, and explain what they did and why they did it.
Good commentary is key! Keep up the fine work out there! And thanks again for writing in! I hope you have some excellent time off!😃 All of us appraisers are wiped out from a crazy year of appraising.
Great content here, Jamie! I’ll have to check this off my bucket list too! I agree with you that appraisers need to be consistent because it makes it look like what we do is very random. I typically go with the width so that I do have consistency throughout my reports. It is similar to how I handle basement garage parking as well. It may be possible to park 4 cars in a basement but they would be parked tandem, one behind the other, which makes it difficult when getting out of the garage. If you look at how many cars you can park side by side it would be two. Sometimes agents are confused about this until I explain to them whit I do it. Keep up the great work and Happy Holidays to you and your family.
Thanks so much Tom! Great point about reporting garage size too! I report the garage size like you, side by side. If there is some added value for having a deeper garage, we can certainly address that and appraise accordingly. I’m glad I’m not the only one who had this on their bucket list! LOL! Thanks so much for your kind words and well wishes my friend! I hope you and you’re family enjoy some relaxing time together this month! Give my best to your family!