Professional Appraiser - Minneapolis, MN
Homeowners often think that if the put money into their home, they will recover that investment when they sell the home. Unfortunately, this is rarely the case. For example, let’s say that you finally put that basketball court in your backyard, complete with a concrete base and lighting. It cost you $15,000. Does that mean that the value of your home just increased by $15,000? Probably not, unless you find the perfect match, like an aspiring Stephen Curry. Otherwise the addition of a basketball court does not add much value to your property. This is the difference between cost and value.
As a Real Estate appraiser in the Twin Cities, I deal with this quite a bit. Homeowners want to get the most value out of their home during a sale, or the largest loan possible. But your $30,000 custom home theater might only increase the value of your home by $5,000 or $10,000. Why is this? Because cost does not always equal value.
An Appraiser’s Recommendations
Here are three tips for dealing with cost versus value in your home.
Understand that cost and value are two different things. This is simply realizing that a $30,000 landscaping job will not increase your sale price by $30,000, the same way that the basketball court I mentioned won’t mean that you’ll get an additional $15,000 in value on your loan.
Separate your emotions from the equation. You might be quite partial to the basement remodel that you did yourself. And while you should be proud of your work, in order to get a good idea of your home’s value is to study comparable homes in your neighborhood. Of course, an appraiser can help you with this.
What works in other neighborhoods will not necessarily work in yours. An in-ground swimming pool may be a selling in the tony area on the edge of town, but if your neighborhood is full of small starter homes, a pool will not be a priority for potential buyers. Avoid this pitfall.
If you are looking to sell your home in Minneapolis, St Paul, or the surrounding areas, I’m here to help. And if you need professional appraisal to determine your home’s true value, I would love to be of service.