Does insulating an unfinished attic add appraisal value?

My assignment was to appraise an older home built in the early 1900’s. This home was a one story home located in a small city in Northeastern Washington. There were limited comparable sales in this area; however I was able to locate a few good comparables. The buyer of the home informed me that there was no insulation in the unfinished attic area, thinking that this would influence the appraisal value.

After reviewing all of the sales and learning about the overall condition of the subject and the comparable sales, I did not change my opinion value based on the lack of insulation of the unfinished attic. In fact I did not even make an adjustment for the lack of insulation in the attic. Do you know why? This is an item that does not warrant an adjustment, because it can not be supported by comparable sales. Secondly, it is common for older homes not to have much insulation in this area; therefore no adjustment is warranted for the lack of insulation in the attic.

The appraiser can do two things. One, if they can support an adjustments, they will support the adjustment with comparable sales. In most cases, they will not be able to make an adjustment because Realtors will not disclose the insulation in the attic, as it is minor element in the overall scope of selling the home.

Or the appraiser can make an adjustment on how much it will cost to add insulation to the attic area. In this case the cost will most likely be so insignificant, that it will not make much of a difference for the appraisal value, depending on how the appraisal is written and what is preferred by the bank, the owner may be required to insulate the attic.

So would it be a good idea to spend your money to insulate an unfinished attic to increase your home value? No. For the appraisal value, this will not increase the value of your home. Insulating the attic may increase the comfort level in your home and save you money on your heating and cooling bill, but it will not increase your home value or the appraisal value.

The insulation may help sell your home. So if you are going to sell your home, by all means, insulate the attic area. If you are looking at homes to buy, make sure the attic offers insulation. As explained above, many times appraisers do not look in the attic, unless it is required by the bank or if the home is being financed FHA and it is required. Regardless if the appraiser looks in the attic, it will cost you real money to insulate the attic, but this is a minor item to consider and usually will be insignificant to create any real changes in the value of your home.