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Truth About Creating An Appraisal?

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projectman36

Freshman Member
Joined
Sep 5, 2016
Professional Status
General Public
State
Louisiana
I purchased my home 3 years ago and I am an avid DIY home improvement guy. I am considering selling or refinancing my home in which I will be getting another appraisal soon. Getting down to my question: After reviewing my last appraisal for my current home it would seem that the majority of the value of my home is determined by comparables of other homes. Mostly taking the square footage and selling prices of these other homes and determining my home's cost per square foot. So am I right by thinking the only way to improve the value of my home is by adding square footage? My concern is that I can pump all kinds of money into my home with new flooring, paint, built-ins, appliances, and even a large detached workshop/mancave w/power & A/C and everything. But my appraisal value will really and truly only be as much as the comparables and how much square foot I have. Homes in my neighborhood go between 200k -250k, my home is actually the largest and sold for 250K, but was very plain jane. I just don't want to waste my time pumping all kinds of finances into my home if it won't do anything for the value. Please let me know if I am right on my understanding?
 

AMF13

Elite Member
Joined
Jan 24, 2002
Professional Status
Certified Residential Appraiser
State
California
I purchased my home 3 years ago and I am an avid DIY home improvement guy. I am considering selling or refinancing my home in which I will be getting another appraisal soon. Getting down to my question: After reviewing my last appraisal for my current home it would seem that the majority of the value of my home is determined by comparables of other homes.YES Mostly taking the square footage and selling prices of these other homes and determining my home's cost per square foot. NO So am I right by thinking the only way to improve the value of my home is by adding square footage? NO My concern is that I can pump all kinds of money into my home with new flooring, paint, built-ins, appliances, and even a large detached workshop/mancave w/power & A/C and everything. But my appraisal value will really and truly only be as much as the comparables and how much square foot I have. YES, MORE OR LESS Homes in my neighborhood go between 200k -250k, my home is actually the largest and sold for 250K, but was very plain jane. I just don't want to waste my time pumping all kinds of finances into my home if it won't do anything for the value. Please let me know if I am right on my understanding?

You have some ideas right and other parts not so much. I'll pump out this quick answer. See above red caps and don't overbuild for the 'hood. I'm sure you will get more detailed info soon enough. :peace:
 

Michigan CG

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Staff member
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Joined
Nov 1, 2006
Professional Status
Certified General Appraiser
State
Michigan
I purchased my home 3 years ago and I am an avid DIY home improvement guy. I am considering selling or refinancing my home in which I will be getting another appraisal soon. Getting down to my question: After reviewing my last appraisal for my current home it would seem that the majority of the value of my home is determined by comparables of other homes. Mostly taking the square footage and selling prices of these other homes and determining my home's cost per square foot. So am I right by thinking the only way to improve the value of my home is by adding square footage? My concern is that I can pump all kinds of money into my home with new flooring, paint, built-ins, appliances, and even a large detached workshop/mancave w/power & A/C and everything. But my appraisal value will really and truly only be as much as the comparables and how much square foot I have. Homes in my neighborhood go between 200k -250k, my home is actually the largest and sold for 250K, but was very plain jane. I just don't want to waste my time pumping all kinds of finances into my home if it won't do anything for the value. Please let me know if I am right on my understanding?


You would be foolish to add square footage for two reasons: First, it is the most expensive thing to do. Second, you have the biggest house in the neighborhood. If you want to add value do the small cosmetic things.
 

Meandering

Elite Member
Joined
Feb 26, 2006
Professional Status
Real Estate Agent or Broker
State
Pennsylvania
3rd, your house is for you to live in, have your family, and enjoy. If you're looking for investment property, buy commercial.
 

normando

Senior Member
Joined
May 2, 2009
Professional Status
Certified Residential Appraiser
State
California
I went to this one house few weeks ago and the improvements were done by a DIY homeowner. It's functional but the aesthetics do not appeal to current market which is unfortunate. You may be proud of your work but not the market. Unless you do good work as a professional contractor and with good taste, the market will pay premium. If not done well, sometimes it's better to rip it all out and start anew if you want to sell top dollar.
 

DTB

Elite Member
Joined
Jun 11, 2004
Professional Status
Certified Residential Appraiser
State
Illinois
Simply put, houses of XX size sell for a range of ZZ to YY. The condition of your house will determine where it falls within the value range of comparable houses of XX size.

In other words don't expect to succeed by making a 400K house in a 250K neighborhood.
 

normando

Senior Member
Joined
May 2, 2009
Professional Status
Certified Residential Appraiser
State
California
My sister bought a house years ago and the improvements looked good. The homeowner did the improvements. The story went that the wife got frustrated with husband and divorced. Anway, the house had problems like it was and still is hot in the main level (needed more windows to open), patio door leaked causing damage to other rooms, etc. I'm wary of DIY when their occupation is different.
 

Elliott

Elite Member
Joined
Apr 23, 2002
Professional Status
Certified General Appraiser
State
Oregon
Your value will be determined more by what other properties in your neighborhood or nearby neighborhoods sell for and the general price trend of real estate, which is strongly influenced currently by super low interest rates. Spending money on improvements is more closely dollar for dollar (or less).

The big jump up in value occurs is when a 'flipper' buys a house in poor condition (like an REO) in a good neighborhood and updates/remodels the heck out of it. And get a good realtor to market and stage it.
 

Terrel L. Shields

Elite Member
Gold Supporting Member
Joined
May 2, 2002
Professional Status
Certified General Appraiser
State
Arkansas
Size matters, but unit value (SF) varies primarily upon condition (which is the observed effective age) and quality. Normando also points out style. Pink bathroom fixtures, shag carpet, black appliances are examples of "dated" colors or materials. Women seem much more attuned to style, so if mama ain't happy, nobody is going to be happy. Consult the home fashion magazines for latest trends. If all else fails fall back on neutral colors and avoid the dark colors. Over-building will damage you, so additional SF isn't a plus unless your home is substantially smaller than average. Condition is big. Fix it and fix it right.

If selling, remove clutter and put in an offsite storage facility. Books, pictures, appliances, pots/pans, knickknacks should be kept to a minimum. Deep clean and hire a steam cleaner for dirty carpets, new carpets are rarely justified unless totally threadbare and out of date. Wax and buff wood and vinyl (don't wax self-shine). Hire a consultant to stage the property if you doubt your own ability.
 

normando

Senior Member
Joined
May 2, 2009
Professional Status
Certified Residential Appraiser
State
California
Size matters, but unit value (SF) varies primarily upon condition (which is the observed effective age) and quality. Normando also points out style. Pink bathroom fixtures, shag carpet, black appliances are examples of "dated" colors or materials. Women seem much more attuned to style, so if mama ain't happy, nobody is going to be happy. Consult the home fashion magazines for latest trends. If all else fails fall back on neutral colors and avoid the dark colors. Over-building will damage you, so additional SF isn't a plus unless your home is substantially smaller than average. Condition is big. Fix it and fix it right.

If selling, remove clutter and put in an offsite storage facility. Books, pictures, appliances, pots/pans, knickknacks should be kept to a minimum. Deep clean and hire a steam cleaner for dirty carpets, new carpets are rarely justified unless totally threadbare and out of date. Wax and buff wood and vinyl (don't wax self-shine). Hire a consultant to stage the property if you doubt your own ability.
It's true, some of the color scheme and style chosen by men do not look that good. I let my wife decide on almost everything in design. When not sure, she asks me. And when it's a wrong decision, it's usually my faulty decision as my wife says.
It reminds me of a house I passed by today. A friend of mine painted his house long time ago and few months later, the adjacent neighbor painted his house the exact color. This is a zero lot line property so when you look at the house, it looks like a HUGE house rather than two separate houses. My friend did not like the copycat neighbor.
 
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