http://www.realestateappraisertips.info/ – Home Appraisers Tip Of The Day 12/01/2009: Twelve Home Improvements That Didn’t Reward: Could These Apply To Your Market?
Justin Pierce has written an article on “12 Improvements That Didn’t Pay: Learn From These Rehab Mistakes” where he warns homeowners not to over-prove their homes. This article is certainly worth reading for locals as well as home appraisers who value such improvements. This appraiser also asked a similar question in a recent article on over improving your home: “Greater Baton Rouge Real Estate Question: Is It Wise To Invest $60,000 For A Pool and Landscaping For A $250,000 Home?”
Here’s a snippet:
“Here are the Big 12 ill Advised Home Improvements I Made
1.) Shower Jets: $1,600 – We didn’t have room to put a jetted tub in the master bath. So I had the bright idea to install shower jets instead.
2.) Marble Tile: $800 – We decided that we wanted to give the master bathroom a little sizzle. So we decided to go with full marble tile floor and surround. It cost us about $800 more that the original ceramic tile quote.
3.) Slate Sidewalk and Porch: $4,600 – Landscaping is always risky. We wanted to really give the house some curb appeal. It did look nice. I wouldn’t do it again.
4.) Sidewalk Removal: $950 – There was a cement walkway right down the middle of the yard. We didn’t like how it cut the yard in two. We had it removed.
5.) Redo the Path at the Side of the House: $800 – I won’t take any credit for this one. My partner got fixated on the side of the house. I told him to breath and let it go but when I came back from a trip I found that he’d ordered a new concrete path and grass in this area. The $800 is just the sidewalk.”
Read the rest of the 12 ill Advised Home Improvements at: 12 Improvements That Didn’t Pay: Learn From These Rehab Mistakes
So, what’s today’s tip(s)?
2 Tips
1.) Know your housing market and know what the actual contributory value certain improvements contribute. One method my office uses when initially setting up the appraisal appointment is to ask the homeowner to write down a list of any improvements made within the past 5 years with cost estimates if possible. This lets the homeowner know that I will take these into consideration and lets them feel like they are communicating with the appraiser. One repeated gripe I’ve heard over my 18 years ago in this business about home appraisers is that they’re in and out of the home too fast and they don’t adequate take time with the homeowner to make sure they ask questions and allow the homeowner to have their questions answered.
One question I receive often is: What Can I do to my home to increase my homes’ value? My typical answer in my local market is to forget adding that pool or deck and concentrate on improving the home itself, both exterior and interior. On the interior, it appears my market is focused on Kitchens and Bathrooms. How would you answer this question? Do you know your local market preferences are?
2.) Use Extreme Caution when you reading those remodeling industry “Job Cost versus Resale Value” studies as they are written by the Remodeling Industry, which is not exactly an unbiased source. This 2008-2009 National Cost vs. Resale Value report says that a $10,601 Wood Deck Addition contributes $8,676 in resale value of $81.8% return on investment. That’s not the case in my local market where that same deck might contribute $1,000 to maybe $2,000 in resale value. This same report states that a $10,537 window replacement contributes $8,132 in resale value or 77.2% return on investment. That too is not accurate in my local market where buyers won’t pay near that kind of return on investment.
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