Real Estate Analysis and Commentary in [CITY]

How Are House "Upgrades" Valued During an Appraisal?
February 28th, 2024 10:44 AM

When homeowners make improvements or renovations to their property, they hope it will increase the home's value. But how do appraisers account for upgrades in assessing a property's worth? Here's an overview of how common upgrades are typically valued.



Documented Updates
Homeowners should have permits and receipts showing the scope and costs of any major remodels or additions. Appraisers can then properly verify projects were done to code and compare investment to potential value added.


Visual Appeal Upgrades
Curb appeal items like new siding, windows, and roof are factored in assuming proper installation. Appraisers assess if upgrades positively impact first impressions for target buyers.


Kitchen Remodels
High-return projects when done with quality materials and logical layouts. Comparable sales data helps appraisers set the updated kitchen's value. Custom jobs require detailed records.


Bathroom Renovations
A standard bath remodel won't yield full cost recovery but adds value proportional to similar recently sold homes. Luxury spa-like updates command higher amounts.


Finished Basements
Livability and functionality upgrades value according to location, features like bedrooms/living areas, and market norms for partially finished spaces.


Landscape Improvements
Hardscaping like patios and mature landscaping presents well but have limited long-term value impact versus other structure upgrades.


Luxury or Specialty Items
Custom pool/spa installations require specific comps. Niche features like home theaters or elevators value subjectively based on maintenance costs.


Cosmetic-Only Updates
A fresh coat of paint or new flooring maintains aesthetic appeal but have nominal value impact without other functional upgrades.


Appraisers quantify upgrade value increases conservatively using local construction cost data and sales analysis of properties with similar features. Value is dependent on suitable market demand for renovated properties. Proper records support premium valuation of verified projects.
Posted in:FAQ's and tagged: FAQ's
Posted by Genie Motto on February 28th, 2024 10:44 AMPost a Comment

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