Appraisers Value Of Remodel

[Ashley Rohlf]

Hello! I am looking for opinions/advice as to a difficult to value home. The home is in a townhome community nestled between Single Family homes. Comparable town homes in the neighborhood within 1/2 mile are limited to four within the past 12 months and 0 isn’t he past 6 months with prices (one pending sale set to close in the next two weeks). Comparable homes were built in 1980s and have all original 1980 finishes where the subject property was completely remodeled (not updated, remodeled to make kitchen and master bathroom more functional) from 2016-2017. I know what the owner put into the property as far as the remodeling costs, but is there a way to quantify what an appraiser typically quantifies a remodel value over a comparable home? The home appraised as a C4 property when home owner purchased two years prior.

 

[Joe Flacco]

What I would do is find a 80's townhouse that has been remodeled without limiting the distance or the date of sale. Then compare that sale to other townhouses in it's subdivision that sold around the same time to determine what the premium is for the remodel.

Have a great day.

 

[Sid Holderly]

Cost vs value reports produced yearly can be a help when paired sales are difficult. These reports are regional and give that consideration in forming your analysis.
Cost books can give an idea of the new difference by comparing the $/sf at different quality levels.

If no paired condo's look at the difference on single-family with the same/similar remodeling.

 

[Ashley Rohlf]

What I would do is find a 80's townhouse that has been remodeled without limiting the distance or the date of sale. Then compare that sale to other townhouses in it's subdivision that sold around the same time to determine what the premium is for the remodel.

Have a great day.

Thank you!! That is where I am struggling- Over the past 3 years within the .5 mile radius everything has remained original 1980s. I think I may have found one that sold in May of last year that is about a half mile away. But I THINK I could run a comp on neighboring properties that sold within a year of that property to perhaps identify remodeling value for the area!

 

[Ashley Rohlf]

Cost vs value reports produced yearly can be a help when paired sales are difficult. These reports are regional and give that consideration in forming your analysis.
Cost books can give an idea of the new difference by comparing the $/sf at different quality levels.

If no paired condo's look at the difference on single-family with the same/similar remodeling.

This is very helpful! Thank you!!!

 

[Michigan CG]

Over the past 3 years within the .5 mile radius everything has remained original 1980s.

Why not go out a couple miles?

 

[Mr Rex]

Start with 1/2 cost of "remodeling" and lower until the market agrees.

 

[Digger88]

Why not go out a couple miles?

exactly. half mile is nothing.

 

[Ashley Rohlf]

Why not go out a couple miles?

House is on the border of the city. If I were to go out into the neighboring city should I exclude those cities from comps?

 

[Ashley Rohlf]

Thank you!! That is where I am struggling- Over the past 3 years within the .5 mile radius everything has remained original 1980s. I think I may have found one that sold in May of last year that is about a half mile away. But I THINK I could run a comp on neighboring properties that sold within a year of that property to perhaps identify remodeling value for the area!

Joe, just wanted to ask you one more question! So I was able to find a town home that is .5 miles away that sold in April of this year. I ran a CMA on the property and based on the comps, my CMA came back at $170k but property sold for $212k ($14k over asking price). My question is, should I assume that the value of the remodel then would be approximately $44k? Or should I take $44k/Square Footage and use that in comparison to the subject property as the house I referenced that sold for $212k is 373 sq ft smaller than subject property.

Thanks in advance!