How do I know if I over improved my house?

How do I know if I over improved my house?

The truth is, the upgrades you put in your house are only as good as the comparable sales in your neighborhood. There really is not a one-size-fits-all answer.

As an appraiser, I get asked all the time ‘How much is a pool worth”?, or “How much will an upgraded kitchen add to my value?”, and the answer is not that simple.

Recently, I did an appraisal on a home that is a classic example of an over-improvement.

This home was in a community where similar size and age homes were selling between $415,000 to $480,000.

The seller of the home purchased the house for $350,000 (several years prior) and put $500,000 worth of improvements into the home.

Thus, she had put $850,000 cash into the home but the values in the neighborhood topped out at $480,000.

Common sense would indicate that this is not a wise decision, (but then again, common sense is not so common, right?).

 

Look through the eyes of typical buyers in your area

Typically, an updated kitchen would add value, but you most likely won’t get the same dollar amount back that you put into it. Also,  look at the bigger picture- what condition is the rest of the house in?  A new $30K kitchen in a house that needs lots of work may not be the smartest idea.

Since we live in South Florida, a new roof is worth its weight in gold to the buyer with a practical mind, but not all buyers in the market see it that way. Roofs are expensive. A new roof can lower your insurance bill and give you peace of mind during hurricane season. In some instances, it’s hard to sell a house with an old roof.  A roof may need replacing before so a buyer can get financing.

A friend of mine just put carpet in her condo. She spent a lot of money on high-end carpet, but when she sold her unit, the buyer just sees her carpet as, well just carpet.

Is the market going to notice those fancy onyx kitchen countertops, in comparison to just granite countertops?

A good question to ask yourself is “Is my local market sensitive enough to define, and support an additional dollar value for XYZ upgrades?

The best advice is to make sure your neighborhood values support the upgrades you are considering, or if you just LOVE it and can’t live without it, and are planning on staying put for a while, then go ahead and do the upgrade if it makes you happy.

The truth is, we need to be happy in the place we call home,  but you may not always get the dollar amount out of the money you put into it.

My home appraisal came in low, now what?

Contact

Dana O'Hara Smith
EXP Realty
772-486-9367
doharasmith@gmail.com
Hobe Sound, FL 33455


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