Appraisal Process Cost vs Value
Appraisal Process Cost vs Value
Are you wondering about the current market value of your home? Perhaps you’re thinking of selling your home in the future. It’s only natural to ask yourself “how much is my house worth, anyway?” Getting your house appraised by a qualified real estate appraiser is the only way to find out your actual property value. Before you do that, we’re here to help you understand the appraisal process cost vs value in regards to the home appraisal process.
The value you get back from home improvements at resale time isn’t always in line with the upfront costs you pay. There are times when a home improvement project might have a high cost but yield a low return. Let’s discuss some common improvements. Some of these improvements add value relative to their costs. Others can detract value.
Home Improvements That Are Likely to Raise Real Estate Values
Attic Insulation — Perhaps your attic doesn’t already have insulation. Adding it can provide significant returns on your upfront investment. This is one of the few home improvement projects that tends to completely cover its upfront costs.
A New Roof — Replacing a damaged roof tends to yield high returns on investment for homeowners.
Exterior Repairs — Real estate experts agree that exterior improvements pay off well. The reasoning is that they enhance a home’s curb appeal. Is your front door falling apart? Does the siding on your home need replacement? If so, you’ll probably want to take care of these repairs before listing the home for sale.
Attractive Landscaping — Maybe you’re starting out with a home built on a bare dirt lot. If so, adding landscaping will probably add value to the home’s appraisal price. Otherwise it’s trickier to calculate the potential ROI that results from new landscaping.
Bathroom Renovations — Bathroom upgrades can add value to a home’s appraisal price. Bathroom renovations tend to provide better ROI in some cases than others. You get better value in cases where the home doesn’t require a complete overhaul of the plumbing and electrical systems. When only minor upgrades are necessary, most homeowners can expect to get back around 65% of their upfront bathroom renovation costs at the time of resale.
Minor Kitchen Renovations — Minor kitchen repairs and renovations tend to pay off for homeowners. However, over-improving the kitchen is a mistake.
Home Improvements That Can Adversely Affect the Appraised Value of a Home
There are home improvements that can lower a home’s market value. If your main objective is to live in your home and enjoy it, this shouldn’t be a high priority concern. However, if your primary objective is to re-sell your home, you should avoid making any of these types of home improvements. There are exceptions. Check with your real estate agent if you’re in doubt. There may be cases where your real estate agent advises you that such improvements are necessities in your home’s immediate neighborhood.
A New Swimming Pool
— A swimming pool is not usually an asset to a home’s appraised value. Many home buyers prefer to avoid buying homes with swimming pools. Pools require constant maintenance. They cannot be used year-round in most locations. Adding a pool could result in a lower valuation. Not only that, it may limit your pool of potential buyers when it’s time to sell the home.
Changing the Home’s Floor Plan to Eliminate a Bedroom — You can’t have too many bedrooms in a home. It’s fine to change the floor plan if necessary. However, eliminating a bedroom is a mistake. A change like this may lower the home’s appraised value. Many real estate appraisers are using property valuation methods that assign value based on the numbers of bedrooms in the home.
Home Expansions That Encroach on the Yard
— Avoid adding onto a home at the expense of yard space. This sometimes has the effect of decreasing the overall property value. Whenever possible, consider other options instead.
Perhaps you need more usable square footage in your home. If so, it’s smart to finish off the basement. Another alternative is to create an attic bedroom. Either of those renovations can add value. The net result is usually positive. You probably won’t get back what you put into them. However, at least you avoid decreasing the home’s value with these improvements.
If you’re in search of an answer to the question of “what’s my house worth,” you hopefully now have a clearer understanding of the appraisal process cost vs value and how any past or future renovations may affect the home’s value. We hope this information has also given you some insights into the valuation methods that a real estate appraiser would be likely to apply in determining the current value of your home. We’re positive this information will be of practical help to you in the future if you’re considering possible upgrades and renovations your home.
If you’re planning to sell your home, consider the benefits pre-listing home inspection report before you even get serious about putting your home on the market.
Team Bourque specializing in Ottawa’s greatest neighbourhoods. Call us (613) 741 0707. If you like this post feel free to link to it or share it on social media.