Dallas Home Appraisals News and Information

We had a call recently from a client who had recently remodeled and updated his home and didn't feel like his appraisal reflected all of the improvements.  Unfortunately, this is a conversation that we have with clients all too often.  Many people believe that if they spend $30,000 remodeling and updating their kitchen (for example), they will increase the market value of their home by the same amount.  As often as not, that is not the case.  Sometimes you can end up spending more on updating than buyers are willing to pay for a home in your area.

Although there are some general expectations expressed in percentages of the value of certain improvements - 30-50% for a pool, 80-90% for a kitchen remodel, 70-80% for a bathroom - much depends on the market and especially the area in which you live. If you live in an area where most homes are larger, have more bedrooms or baths or greater living area, buyers will expect to pay less for your house or move on to other listings.  If you add on to make your home comparable to the others, you will likely only recoup the difference between the pre- and post-remodel values.  That may or may not cover the cost of your addition, depending on your contractor and the materials you use (among other factors).

If you are making improvements because you intend to stay in the home for many years and are simply willing to spend whatever it takes (within your budget) to get what you want, recouping your costs may not be important to you.  However, if you are remodeling with the intention of selling it is wise to understand what the competition in your neighborhood has, what you need to spend to compete for buyers, and what you might be tempted to spend money on that won't add to your market value.  Appraisers call this last category "super-adequacy" - a term meaning any improvement is over and above what a buyer in that particular market area is looking for.

Before you spend money on remodeling or updating your own home or an investment property, especially if you are planning to sell the property in the near future, do yourself a favor and invest in a professional appraisal.  An appraisal will tell you what updates and amenities are typical for your market and which ones will add the most to the market value of your house.  Contact Blue Star Appraisals Inc. for more information or to schedule your appraisal.