upgrades do they count

[mike kauffman]

I just seen our apprasiel on the house where selling. He states that the new furnace, new tilt in windows, new hot water heater, are all maintence and do not add value to a home. Is this correct? He also states that a finished 764 sq ft basement redone in 2004 only adds 2k to the value of the home. Any help would be greatly appreciated.

 

[Otis Key]

Mr. Kauffman

Weclome to the forum. First, your questions can't be answered in the manner of which I assume you would them to be. Reason, the odds are that none of us here appraised your house and we don't know where you are located (it would be helpful to get better responses, if we knew where you were located - at least the state if not the city).

Next, water heaters, heating systems, etc., are all part of preventative maintenance. While you, as the homeowner, may consider it an upgrade, it is something that must be done from time to time. The "tilt in windows" are something that are considered, typically, to be upgrades but the market reaction is what the appraiser must reflect and work with - if there is little to no reaction (or market indicated data) then the appraiser cannot just pull a number out of the air and apply it - s/he must be able to back up those adjustments.

Now the basement is locally influenced factor. In fact, we have few houses in my area with basements. Also, per ANSI standards, fannie mae and other quasi-government standards and requirements, a basement is a separate line item factors and addressed on the report there. What the appraiser probably did was reflect a market indicated action/reaction to a basement. It's one of the same factors I mentioned above.

I have actually seen where a basement was a negative factor. Have you made an effort to get the lender to grant permission to discuss this with the appraiser? The appraiser must have the "client's (lender) permission" to discuss anything about an appraisal with anyone else.

Good luck with it.

 

[mike kauffman]

The whole process with this apprasier has been bad. To begin with he messed up his measurements by 258 sq ft. He came back out and remeasured and fixed his error. I was forwarded the new one and he adjusted his price by 9000 dollars to the apprasiel and 20k to the cost approach. Yesterday with the incorrect measurements the cost aproach and apprasial amount where within 465 dollars of each other today they are 9k apart. He states that a 765 sq ft finished basement adds about 2k. Basements are big here and everyone wants a finished one as it adds so much more space. The homes he is using as comps some are 250 sq ft smaller.

 

[wyecoyote]

Like Otis stated. Difficult to say since we don't know you location, state, county or city would somewhat be helpful. The new furnace, water heater and windows. Depends on what the market for your area sees these as and the age of the house. On an older house the furnace, water heater and windows might be considered maintenace items. Since one needs a furnace and water heater. These things do run out from time to time and need to be replaced. Hard to say whether or not someone would be willing to pay more or less for new(er) ones.

The basement factor would be it depends. Is it a dug out style basement or daylight basement. Waterfront, view house, or just city lot. Around here dug out style finished basements add little value. Daylight style can add some value. While water front and view properties (daylight style) they made add as much as the above grade square footage (around here).

 

[mike kauffman]

West lawn, pennsylvania. the home is 81 years old. The basement is mostly below grade however does have windows above grade. our home sold to the first people that walked in the door 4 days after being put on the MLS, some of the comparable sales used where on the market for 120+ days, keep in mind our market isnt like the ca market we still have plenty of buyers and there still is tons of real estate changing hands. Basement are huge here, everyone is finishing them and nobody understands why it is worth only 2k, we added 764 sq of living area while it isnt worth above grade it should be worth more. whats more is he screwed up my house by 1/4 square ft wise, when he corrected his mistake it only added 5% value. in addition the cost approuch on the messed up one was only 400 dollars away from the appraisal value, with the updated one it is 9300 dollars away

 

[Pamela Crowley (Florida)]

OK Mike, first, WELCOME to the AppraisersForum! We're glad you found us to ask your questions here.

Next, it sounds like you need an experienced appraiser to review that appraisal. Without seeing that appraisal and being competent in YOUR neighborhood, there's no way we can answer your questions properly.

Can you send the appraisal to me via email? If so, please do.

My email: pec514 @ yahoo. com (remove the spaces to sent an email to me)

Then, we can start to go forward.

 

[mike kauffman]

i will and thank you, i will send both appraisels the one that was first done that is messed up then the second with correct sq ft. I really do appricate it, and thank you so much for your time.

 

[JTip]

Union or Berks County?

In my area of Pennsylvania, 80-100yo homes are common. 2 story, frame, unfinished basements.... Updates are manditory in my market area for homes of this age and construction. Its hard to get full price for a home with single pane windows, old 60% efficient furnace and old water tank. Investing in these maintaince upgrages extends the life of the home and can give it its maximum value and marketability as compared to a similar home without the upgrades.

I noticed you said your home was on the market for 4 days as compared to the 120+ of the sold properties.... Was your home priced correctly? Could it have been sold quick due to a low starting price?

A finished basement, in my market, in a older home does not bring a dollar for dollar value. A minimal adjustement is given for finished or partial finished basements because most of the foundations in these old homes are stone and tend to be damp. Sump pumps and dehumidifiers are common. I do not know your market area, these comments reflect my partictular area of Pennsylvania.

Good luck,
Shane

 

[mike kauffman]

Hi Shane,

Berks county, our basement was studded out and drywalled, it has to pour for days and i mean pour for us to get damp, the once in ever 10 years storm. The windows are good windows tilt in etc, we replaced the 60% furnace with all new copper piping and the top of the line furnace we didnt skim, we all thought it was priced correctly, but i guess every1 was wrong according to the appraiser. We had it for sale at 149k, offer was for that with 5k kickback. As u know we arent really in a bad market right know in this area, i actually read the 2nd q reports and realators sold more in the first half of 06 then in 05. I wasnt expecting dollar for dollar on the basement but 2k to me is a insult, we had this entire room gutted and redone down to the studs. To be honest it cost 1500 in dumpsters lol. he came back with a correct sq ft measure and it bumped the value upto 135000 still a far shot from what every1 thought.

 

[mike kauffman]

also if the cost approace is 143900 and he appraised at 135000. with the incorrect appraisel number he has cost approach at 126453 and appraised value at 126000