“Home Improvements don’t Always Equate to Value”

“Home Improvements don’t Always Equate to Value”

 

 

I have received the appraisal report and I am confused.  I have finished all work on the house (especially the listed things as the appraiser told to get those completed) and it is in better condition than it was last year.  The value is continuing to drop?

We’ve made lots of improvements, but the value went down again. 

 

Home improvements don’t always mean that the value will increase, especially in some markets. We could not get a refinance done last year but the client was convinced that based on the improvements that were made the value will have increased enough to be able to accomplish the refinance.

 

Fortunately we are close enough for the owners to take money out of pocket to have the refinance accomplished, but that is not the case for many.

 

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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

www.righttracfg.com

www.joepetrowsky.com

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Joe Petrowsky does not guarantee nor is in any way responsible for the accuracy of the information provided herein, and provides said information without warranties of any kind, either expressed or implied.

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Comment balloon 18 commentsJoe Petrowsky • July 11 2016 10:48AM

Comments

Good morning Joe.  Percentage wise how often do you see this happen?

Posted by James Dray, Exceptional Agents, Outstanding Results (Fathom Realty) about 3 years ago

Joe: The market and type of improvements made will both have an impact on the home's value. Make it a great day!

Posted by Anita Clark, Realtor - Homes for Sale in Warner Robins GA (ColdwellBanker SSK Realtors ~ 478.960.8055) about 3 years ago

Sometimes the market goes down independent of improvements.  and, you don't get $1 for $1 return on capital improvements.  And, of course, maybe some of the improvements weren't capital improvements.

Posted by Debbie Gartner, The Flooring Girl & Blog Stylist -Dynamo Marketers (The Flooring Girl) about 3 years ago

Good morning, Joe... I'm always reminding home owners that most appraisers aren't valuing many improvements and upgrades for much more than 50 cents on the dollar. And some get virtually no value and are simply considered maintenance investments.

Meantime, HAPPY BIRTHDAY TO YOU! Hope it's your best one yet!

Posted by Nina Hollander, Your Charlotte/Ballantyne/Waxhaw/Fort Mill Realtor (Coldwell Banker Residential Brokerage ) about 3 years ago

Good morning Joe Petrowsky,

It's hard for home owners to understand the value appraisers place on their homes. I can send 2 appraisers out and they can differ..always is based on a certain appraisers interpretation. Happy Birthday Joe! Have a great day!

Posted by Dorie Dillard CRS GRI ABR, Serving Buyers & Sellers in NW Austin Real Estate (Coldwell Banker United Realtors® ~ 512.750.6899) about 3 years ago

Good morning Joe and Happy Birthday. I know this is true and life happens. Enjoy the day.

Posted by Sheila Anderson, The Real Estate Whisperer Who Listens 732-715-1133 (Referral Group Incorporated) about 3 years ago

Money in doesn't always equal money out...what some people like to think of as "improvements"....ie  new roof....siding etc.  are really maintenance issues.

Posted by Sally K. & David L. Hanson, WI Realtors - Luxury - Divorce (EXP Realty 414-525-0563) about 3 years ago

Good Morning Joe -  I can see how that happens with market fluctuations.  Glad you were able to help him get it done.

Posted by Grant Schneider, Your Coach Helping You Create Successful Outcomes (Performance Development Strategies) about 3 years ago

Happy Birthday Joe Petrowsky 

Posted by Noah Seidenberg, Chicagoland and Suburbs (800) 858-7917 (Coldwell Banker) about 3 years ago

Hey Joe Petrowsky Where is this house. It must be in a really "good" area.

Bill Roberts

Posted by Bill Roberts, "Baby Boomer" Retirement Planner (Brooks and Dunphy Real Estate) about 3 years ago

Unless you add square footage, I can't see the appraiser adding anything much. I just let go of a client who thought his home would go up too because he put in new flooring and such. What he didn't take into consideration is the  "wear and tear", these are things he should have done anyway to keep the value where it is. It's amazing how many sellers say "I want to get out of it what I put into it" and, in many cases, they want to include their own labor.

Posted by Hella M. Rothwell, Broker/Realtor®, Rothwell Realty Inc. CA#01968433 Carmel-by-the-Sea about 3 years ago

That is so true Joe. I have a client that closed new construction in January 2016. They now need to sell ... and they have $44,000 in upgrades they have made. They will likely be taking a loss ... so sad. 

Posted by Kathleen Daniels, San Jose Homes for Sale-Probate & Trust Specialist (KD Realty - 408.972.1822) about 3 years ago

Happy birthday Joe! Thanks for always being an attentive AR contributor!

Posted by The Julie Morales Team, Real Estate Questions? Call (832) 367-3412 (RE/MAX Cinco Ranch) about 3 years ago

Joe yep many think what they put in they will get back in value, but as you so well pointed out that is not the case.

Posted by George Souto, Your Connecticut Mortgage Expert (George Souto NMLS #65149 FHA, CHFA, VA Mortgages) about 3 years ago

Joe, I have never run into this issue but definitely markets that are level or decreasing certainly are a struggle & I do agree with Nina's comments.

Posted by Ginny Gorman, Homes for Sale in North Kingstown RI and beyond (RI Real Estate Services ~ 401-529-7849~ RI Waterfront Real Estate) about 3 years ago

HAPPY BIRTHDAY!!!

Unfortunately, it's a rude awakening. The value is just an opinion but it's a costly one if it doesn't appraise. 

 

Posted by Patricia Feager, MBA, CRS, GRI,MRP, Selling Homes Changing Lives (DFW FINE PROPERTIES) about 3 years ago

Hi Joe, most home improvements are not going to add much value to the home, it's best to think it through before spending thousands of dollars.

Posted by Beth Atalay, Cam Realty of Clermont FL (Cam Realty and Property Management) about 3 years ago

Joe I guess you need another Appraiser:) just kidding on a side note Happy Birthday, Endre

Posted by Endre Barath, Jr., Realtor - Los Angeles Home Sales 310.486.1002 (Berkshire Hathaway HomeServices) about 3 years ago

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