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Value Of Replacing Stucco

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investor

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I'm a real estate agent. About 9 months ago a client of mine agreed to purchase a home for $590k. The exterior of the home is stucco and the client had a stucco inspection done. There were some significant issues and, after estimates were secured, an adjustment of $40k was negotiated. Some but not all of the windows were going to be replaced, extensive caulking was to be done and some of the stucco was to be replaced. The client purchased the home and is now considering replacing all of the stucco and all doors and windows at a cost of $120k ($95k for stucco and $25k for windows and doors). In essence, he will be spending an extra $80k over the original $40k discount that was negotiated. He is wondering how much of the $80k will be reflected in the value of the home post improvements. Can anyone help me out here?
 

AMF13

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California
Magic 8 Ball says, less than $80k most likely. :shrug:
 

hastalavista

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May 16, 2005
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Certified General Appraiser
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California
Buyers expect the exterior wall surface (stucco, in your case) and windows to work.
How much is a house worth with its exterior wall surface and windows in working order as expected in the market? Likely as much as any other home that is similar in size, location, etc., and has its exterior walls and windows working. You may get a bump because your components are new/newer than the alternative, but I wouldn't expect that the market would react such that the cost of replacing/repairing those components are fully recaptured.
 

DTB

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Illinois
Probably no more than the 40K you were able to lop off the sales price because this is what needed repairing.

Now your buyer is making a personal choice to replace all the stucco, likely any extra bump will result from the new tight windows being installed.
 

Mike Kennedy

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Sep 28, 2003
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Certified Residential Appraiser
State
New York
I'm a real estate agent. About 9 months ago a client of mine agreed to purchase a home for $590k. The exterior of the home is stucco and the client had a stucco inspection done. There were some significant issues and, after estimates were secured, an adjustment of $40k was negotiated. Some but not all of the windows were going to be replaced, extensive caulking was to be done and some of the stucco was to be replaced. The client purchased the home and is now considering replacing all of the stucco and all doors and windows at a cost of $120k ($95k for stucco and $25k for windows and doors). In essence, he will be spending an extra $80k over the original $40k discount that was negotiated. He is wondering how much of the $80k will be reflected in the value of the home post improvements. Can anyone help me out here?

Yup. An Experienced LOCAL Certified Appraiser. Engage the services of one to perform 1. appraisal "as-is" and 2. an appraisal "subject to planned improvements" < based on the hypothetical condition that the planned renovations had been done on the Effective Date of Appraisal ( will need written specifics on the quality and materials needed to accomplish whatever changes may be made). Cost has no bearing on what the Market dictates ROI may be. Improvements may return cost, more than cost, or less than the investment made. As with all aspects of Market Value - it depends on what competitive buyers of OTHER, competitive local properties which would serve as substitutes for the subject's real property Improvements demonstrate.
 
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AMF13

Elite Member
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Jan 24, 2002
Professional Status
Certified Residential Appraiser
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California
Yup. An Experienced LOCAL Certified Appraiser. Engage the services of one to perform 1. appraisal "as-is" and 2. an appraisal "subject to planned improvements" < based on the hypothetical condition that the planned renovations had been done on the Effective Date of Appraisal ( will need written specifics on the quality and materials needed to accomplish whatever changes may be made). Cost has no bearing on what the Market dictates ROI may be. Improvements may return cost, more than cost, or less than the investment made. As with all aspects of Market Value - it depends on what competitive buyers of OTHER, competitive local properties which would serve as substitutes for the subject's real property Improvements demonstrate.

Magic 8 Ball says no way they paying for that. Fuggedaboutit. :rolleyes:
 

Meandering

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Feb 26, 2006
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Real Estate Agent or Broker
State
Pennsylvania
I'm a real estate agent. About 9 months ago a client of mine agreed to purchase a home for $590k. The exterior of the home is stucco and the client had a stucco inspection done. There were some significant issues and, after estimates were secured, an adjustment of $40k was negotiated. Some but not all of the windows were going to be replaced, extensive caulking was to be done and some of the stucco was to be replaced. The client purchased the home and is now considering replacing all of the stucco and all doors and windows at a cost of $120k ($95k for stucco and $25k for windows and doors). In essence, he will be spending an extra $80k over the original $40k discount that was negotiated. He is wondering how much of the $80k will be reflected in the value of the home post improvements. Can anyone help me out here?

Market value = evidence from the market = adjustment of $40k was negotiated

You're an agent. Do your sellers typically credit back 100% of costs to repair?

There is your market reaction to repairs. What the buyer and seller negotiate.

.
 

Bobby Bucks

Elite Member
Joined
Jan 27, 2002
Professional Status
Real Estate Agent or Broker
State
North Dakota
Is the stucco synthetic stucco (EIFS) or hard coat? If it's synthetic, did your local market have issues with it in recent years? In some areas there is still a major stigma attached to this material.
 

Howard Klahr

Senior Member
Joined
Oct 4, 2004
Professional Status
Certified General Appraiser
State
Florida
how much of the $80k will be reflected in the value of the home post improvements.

I'm a real estate agent.
As I am sure you are aware, it is not possible for anyone here to provide an answer to your question based solely on the information presented in your post.

To address the theme of your question however repairing deferred maintenance / fixing deficiencies are not property updates.
 
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