The Dreaded Indoor Pool Question

[J Grant]

I have read many other questions and comments posted about indoor pools. We live in Northeast Florida. The pool room was built by the former owner who was an engineer. Room is 32 x 60 and the pool is 15 x 30. Over the pool is a 15 x 30 retractable glass roof. Also in the room is a 12 ft wide solid brick fireplace, full bathroom and a walk in redwood sauna. A few years ago, we installed a 10 ton Trane heating and air system ducted through the ceiling.

Everything was professionally done and permitted. The city reflects this room as heated space.

This room is attached to the house but is separated by two doors. Certainly a safety issue with children to ensure you can lock access when necessary. We use this room just as often as the rest of the house...maybe more. Very comfortable.

Being a reasonable person, in my neighborhood, I would not expect to sell this house pricing this room at the same square footage as the main part of the house. It would price too high for the area.

Have already paid one appraiser to value the house. He simply compared it to other homes with outdoor pools and noted that it would cost $150k to build this space in the current market.

My realtor reviewed this appraisal and felt it was too low.

Classic Realtor reaction. I think their first words as babies are, "It's too low. " They stick listings on MLS at high prices, and the listing sits there a year or longer. Let her put it on market, see what price it gets, then you can see if it "low" or not. Can always ask a bit more and come down, but know that over pricing a home can mean it sits on market and eventually gets price slashed to below what it could have sold for initially.

She had her appraiser friend stop by for an opinion on the room. His advice was that the room could not be considered square footage because the roof retracts (not sealed). However, the sauna and bathroom can be counted. He believes the room adds $10-$20k in value. (Just the AC unit cost $10k to install.)

Appraiser friend correct that would not be sf as living area. His estimate, perhaps good, but unknown from afar.

My question: Is there a right/wrong way for appraisers to value this space?

There is not a "right" or wrong way, but there are credible ways and supported ways. Recognize that for these type assignments, the value sought is market value. Read the market value definition on the cert page. The market value definition references "typically motivated buyers". Do most typically motivated buyers go out searching for a home with an indoor pool room? Most often, they don't. Ask your RE friend how many buyers come in and specify they want an indoor pool. Most often, none, or one every few years. Most buyers want an outdoor pool, even in N Florida. So this room might be an over improvement, or super adequacy. An individual buyer might want it and be willing to pay close to cost, but that is not, in most areas, the typically motivated buyer, and it might take 5 years for that buyer to show up. Appraisers use reasonable market exposure for area....if reasonable market exposure is (days on market) is 6 months, that factors in as well.

Imo, these features tend to make some buyers not consider the house at all. Other typically motivated buyers may be interested in the house, and find a way to use the indoor pool and pay a bit more for it. But only putting it on the market will tell. The fact that few people build an indoor pool in an area does indicate it is not a popular option, as another poster said. Best of luck, it will sell, when it sells, let us know the price and marketing time as we need feedback and information as well!

 

[Jerry Dell]

Though I am not in your area. I am in a rural Area in SE Alabama, I recently saw a house in this rural area sale that had a in door pool. This is not what you want to hear, but the pool did not add any incremental value to the sale

 

[Kim Whiting]

Few that have done or know how.........unhuh, wonder who would diss everyone else while his name prominently displays he's a CG?
Have done many of these. Data isn't always available even going back 5 years. Typically indoor pools add nothing to value versus outdoor inground pools. Reduced market is perhaps the biggest issue. Most Probable price in an open market, etc. One can therorize all they want. Families with small children will run in the other direction. Increased energy use reduces the market even more. Most any appraiser would compare values as best possible between inground and indoor pools and see if there's any value enhancement or loss for an indoor pool/area. It doesn't take a CG to use common sense.

 

[mark hurlock]

It was recommended to us that we pay for an appraisal before putting the house on the market. The comps used by the appraiser did not include any homes with indoor pools. One did not have a pool at all but a recreation room.

My husband and I are downsizing our way to retirement and have already moved to Tennessee. This is too much house for us at this point and do not want to rent it. So, on the market it goes.

So is an appraisal that is based on houses sold in the area without the indoor pool reliable? Certainly tough to find comparables for such a unique feature.

In my opinion,you need a face to face or phone conversation with a good appraiser to ensure your understanding.

You might do better asking for recommendations on who to call rather than asking for specific advice.

Not that these guys and gals aren't helpful because they are. But you will get bits and pieces here when you really need a lengthy conversation.

JMO.

 

[tso2214]

Thanks to each of you for your insight. As requested, I will update this site and let you know how things turned out.

 

[J Grant]

That would be much appreciated. Appraisers need information , how long these atypical properties take to sell, if they sell around the same price as homes with outdoor pools or owner got more $ etc.

Best of luck!

 

[Tim Hicks (Texas)]

Also, inquire about an reputable appraiser, not just some appraiser the agent suggests. The agent suggested appraiser may or may not be a reputable appraiser with the knowledge needed to complete this assignment. I would "shop" for a knowledgeable appraiser with experience for this type property.

 

[Scott McCallum]

TSO2214, I am an appraiser in Illinois - have been for over 25 years. I have appraised several residences with an indoor pool (aka natatorium). I have never completed an appraisal on any of them without the inclusion of data of other houses with such a feature (often times on a separate grid, comparing it to properties from: a different timeframe, different area, etc...). By doing so, I can derive my adjustment for the natatorium. I also have a natatorium. Here, there were days that it was 30+ below with the wind chill...and I was swimming with my kids. I, like you, bought my house with this feature already present and then updated it to more modern specifications. They are truly unique. I will never own another house without one. I would not have an appraiser who is not familiar with how to appraise them (not just whether or not they should include it in GLA - but actually have experience appraising houses with them) appraise my house. If you do some research, make some calls to area appraisers, I am confident that there is a professional in your area with experience with them that you can hire.

 

[J Grant]

Scott, what were your findings from different areas? Do they sell for more, or not? (and if so, how much more)

How can one possibly make reliable extractions from vastly different areas.... and do you have MLS on all these areas to see whatever features or amenities impacted the price?

I just think looking for an appraiser who specialized in homes with indoor pools is an odd choice...imo an appraiser very familiar with subject market area and who has also appraised complex properties would be a good choice ...

One also has to look at cost, and climate...North Florida where OP is located is more of a year round warmer climate so need (for most buyers) of an indoor pool room would be less critical aka swimming year round...a good pool heating system could accomplish much the same with an exception of the few weeks of cold snaps.

 

[Scott McCallum]

How can one possibly make reliable extractions from vastly different areas.... and do you have MLS on all these areas to see whatever features or amenities impacted the price?

The word "vastly" was never used in my reply. Its inclusion implies that I could be thinking nationally. I am not. And, yes, I do have MLS for the areas from which I am able to find sales with an indoor pool.

I just think looking for an appraiser who specialized in homes with indoor pools is an odd choice...imo an appraiser very familiar with subject market area and who has also appraised complex properties would be a good choice ...

I never stated "just looking for an appraiser who specialized in homes with indoor pools". I advised that the owner should find an appraiser who has experience with indoor pools to complete the appraisal. Perhaps I should have been more specific and stated that a knowledgeable, local appraiser with such experience should be sought out? My bad.


One also has to look at cost, and climate...North Florida where OP is located is more of a year round warmer climate so need (for most buyers) of an indoor pool room would be less critical aka swimming year round...a good pool heating system could accomplish much the same with an exception of the few weeks of cold snaps.

I agree. There are many factors that need to be addressed/considered. That is why someone knowledgeable about indoor pools should be used.

To answer your first question, "Do they sell for more, or not?"...it depends on the market (although I have, in my market area, seen only one sell where a premium was not present) - which as you stated - is why a knowledgeable professional proficient in the market should be used - but I would tweak that to suggest asking about their experience with indoor pools.