“Some Features May Not have Relevance to Value”

“Some Features May Not have Relevance to Value”

 

 

There are many features in my home that were not accounted for...such as radiant heat ( even in the basement), antique random width oak flooring throughout the entire house, wood boiler system from outside with oil backup, custom kitchen and custom working pantry, and more. I understand there is a format to follow for pricing so it could be difficult.

 

Most of us think our property is worth more than it really is. The challenge for any appraiser is to whether or not there are comparable sales that justify the value that a homeowner has in mind.

 

This homeowner believes her property is worth $700,000, but an appraisal that was done over a year ago came in at $500,000 and they have a buyer for $550,000. It is a unique property that sits on 37 acres of land and quite frankly not replaceable at the $550,000 price.

 

Hopefully there have been some sales that will justify the value that they have in mind.

 

Image courtesy of stuartMiles/freedigitalphotos.net

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Joe Petrowsky, NMLS #6869

Right Trac Financial Group, Inc. NMLS #2709

110 Main St.

Manchester, Ct. 06042

Office: 860 647-7701 x116

Fax: 860 647-8940

Cell: 860 836-9294

Email: joe@righttracfg.com

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Comment balloon 27 commentsJoe Petrowsky • January 22 2016 12:49PM

Comments

Good morning Joe. Some items have less value than there original cost. It is just the way things are. Enjoy your day!

Posted by Wayne Martin, Real Estate Broker (Wayne M Martin) about 1 year ago

Not everyting that is added to a home adds value

Posted by Joe Jackson, Clintonville and Central Ohio Real Estate Expert (Keller Williams Capital Partners Realty) about 1 year ago

Hi Joe.  Always difficult for sellers to understand that there home is only worth as much as someone is willing to pay for it.  If they don't accept that fact, they are free to keep the home and enjoy it.

Posted by Gabe Sanders, Stuart Florida Real Estate (Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales) about 1 year ago

Good morning Joe.  Don't know about your area but appraisals around here are only good for 90 days.  I would get another one done.

Posted by James Dray, Exceptional Agents, Outstanding Results (Fathom Realty AR LLC) about 1 year ago

Joe Petrowsky Good morning.   Totally agree with Gabe Sanders that it is hard for some sellers to understand their home is only worth what a buyer is willing to pay for it in today's market, not what their neighbor got a year ago or whenver.  

Posted by Elyse Berman, PA, CRS, Pet-Friendly Realtor, 561-716-7824 (Realty Associates Florida Properties) about 1 year ago

So many sellers have unrealistic expectations in what their house is really worth. I guess this appraisal opened their eyes...

Posted by Lawrence "Larry" & Sheila Agranoff. Cell: 631-805-4400, Long Island Condo & Home Sale Specialists (The Top Team @ Charles Rutenberg Realty 255 Executive Dr, Plainview NY 11803) about 1 year ago

Joe Petrowsky sounds like your sellers have a great piece of land 37 acres. Value has so many meanings when it comes to Real Estate and the appraisers are the check and balances. Best of luck with the sale.

Posted by Michelle Tucker ~ Pooler Real Estate, Rincon~Savannah~Richmond Hill (!Daley Real Estate) about 1 year ago

Oh yes, this is so difficult. The biggest issue is when things are "taste specific."   Custom kitchens or custom anything and specific types/species of woods are not appealing to everyone and hence lower value.  I would think the radiant heat would be adding some value but yes, basements aren't worth as much (maybe 1/3" of key living space).

Posted by Women of Westchester Working Together, Women helping Women get ahead (Women of Westchester Working Together) about 1 year ago

Good Morning Joe: This is a very common perception among the silent generation... basing it on my past experiences and encounters. It would be harder to convince them of the actual value but it will come around after their listings expired three times.

And I would not be the one who would be listing it the first and second time.

Posted by Maria Gilda Racelis, Home Ownership is w/in Reach. We Make it Happen! (Home Buyers Realty, LLC-Manchester, Bolton. Vernon,Ellington) about 1 year ago

I see this so very often, Joe... homeowners putting in upgrades that appeal to them and are nice to look at, but don't really add serious value to the home or even provide value to a potential buyer. 

Posted by Nina Hollander, Your Charlotte/Waxhaw/Fort Mill Area Realtor (RE/MAX Executive | Charlotte, NC) about 1 year ago

Big mistake so many home owners make.....not everything they do adds value. This is a huge variance.

Posted by Roger D. Mucci, Lets shake things up at your home today! (Shaken...with a Twist 216.633.2092) about 1 year ago

Joe, Seller do always think their home is worth much more with unique additions that appraisers feel the value is much less! 

Posted by Joan Cox, Denver Real Estate - Selling One Home at a Time (Metro Brokers - House to Home, Inc. - Denver Real Estate - 720-231-6373) about 1 year ago

Good morning Joe,

Sounds like a unique home that would be interesting to see.

Good luck with the appraisal.

Make yourself an astonishing day.

Posted by Raymond E. Camp, Licensed Real Estate Salesperson Greater Rochester (Nothnagle) about 1 year ago

Good morning Joe. There are things that do not fit into appraisal guidelines but do add value. It depends on the kind of appraisal and most refinances and mortgages don't do the kind that would allow for unusual properties.

Posted by Sheila Anderson, The Real Estate Whisperer Who Listens 732-715-1133 (Referral Group Incorporated) about 1 year ago

Appraisers really have a hard time with some of these properties, I know. Because I have gotten a lot of calls over the years asking for my help in comps. Oh, why would they call me? Because I'm known for having had truly unique listings along the way.

Posted by Hella M. Rothwell, Broker/Realtor®, Rothwell Realty Inc. CA#01968433 Carmel-by-the-Sea about 1 year ago

Joe, great example of the difference between "value" and "market price". That's an especially tough concept to explain to homeowners who have lived in a property for a long time.

Posted by Tom White, Franklin Homes Realty LLC, Franklin TN (Franklin Homes Realty LLC (615) 495-0752 or www.FranklinHomesRealty.com) about 1 year ago

Joe Petrowsky appraisal is an art, not a science. Too many appraisers want to attack the problem as if it were science.

Replacemnt cost is a valid approach to appraisal, not only market value.

Bill Roberts

Posted by Bill Roberts, "Baby Boomer" Retirement Planner (Brooks and Dunphy Real Estate) about 1 year ago

Joe-Appraisals for unique properties are art, some science,  and subjective to an extent. Tough to reconcile and with that difference of opinion it may be on the market a while.

Posted by Wayne Johnson, San Antonio REALTOR, San Antonio Homes For Sale (Coldwell Banker D'Ann Harper REALTORS®) about 1 year ago

Replacement value should not be confused with market value.

This is a good story to share.

Posted by Roy Kelley, Roy and Dolores Kelley Photographs (Realty Group Referrals) about 1 year ago

Joe - yes it is all about the market forces.  With no buyers it is just a value to the owner.

Posted by Grant Schneider, Your Coach Helping You Create Successful Outcomes (Performance Development Strategies) about 1 year ago

Hi Joe -- most times pricing involves a combination of art and science.  It's not always so black and white.

Posted by Michael Jacobs, Los Angeles Pasadena Area Real Estate 818.516.4393 (Coldwell Banker Residential Brokerage) about 1 year ago

I had a client tell me it cost her $3,000 to replace a boiler that had fallen down the hill, crashing into her home, and for that reason, she should get $10,000 more. What? She won't even get $3,000 extra. Maintenance does not equal value.

Posted by Elizabeth Weintraub Sacramento Real Estate Agent, Top 1% of Lyon Agents, Put 40 years of experience to work for you (Lyon Real Estate) about 1 year ago

Joe love how you articulated this, indeed value to the home owner does not always translate to the value perceived by buyers, appraisers....and the list goes on and on.... Sounds to me they either become realistic or they need a cash buyer....Endre

Posted by Endre Barath, Jr., Realtor - Los Angeles Home Sales 310.486.1002 (Berkshire Hathaway HomeServices) about 1 year ago

Joe not having good comps is a problem, especially with unique properties

Posted by George Souto, Your Connecticut Mortgage Expert (George Souto NMLS #65149 FHA, CHFA, VA Mortgages) about 1 year ago

That is terminal uniqueness Joe. It is hard for some people to see around this.

Posted by Noah Seidenberg, Chicagoland and Suburbs (800) 858-7917 (Coldwell Banker) about 1 year ago

I just went through that with a seller.  The house had many features that were just different and showed care and additional cost to build. It didn't justify the $250,000 additional value the seller wanted when comps were there to support lower values, land included.

Posted by Ed Silva, Central CT Real Estate Broker Serving all equally (RE/MAX Professionals, CT 203-206-0754 ) about 1 year ago

Great discussion Joe, and value must be in the minds of the appraiser not beholder...support all you want with good comps but it does come down to that for sellers.

Posted by Ginny Gorman, Homes for Sale in North Kingstown RI and beyond (Phillips Post Road Realty ~ 401-529-7849~ RI Waterfront Real Estate) about 1 year ago

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