Home Repairs To Improve Value?

Home equity has come roaring back. Many, can now refinance,  others, are in a better position to sell as the intense demand for real estate continues. Everyone wants to attain maximum value for their home. So what’s the best indicator of a home’s worth?  Simple: the amount a ready, willing, and able buyer is willing to pay for the property at any given point in time. Unfortunately, appraisal figures can be skewed especially, when some home improvements are not considered in the value estimate.

Home value is most important when: refinancing a home or selling a home

When Refinancing: the weight of an appraisal is based upon the facts (including other homes that have sold) and the legal description of the property i.e, bedrooms, bathrooms, square footage, etc.

Improvements that may help a refinance valuation:

  • Additional bedroom or bathroom
  • Addition to the lot size
  • Addition to the garage
  • Improvement that expand “use”  of the home

Improvements such as landscaping, painting, any home improvement more “cosmetic” in nature- main benefit would be for enjoyment of the home, not trying to influence a valuation..

When Selling:  a home buyer is going to take into consideration all of the facts associated with the property, location, lot size, square footage, bedrooms and bathrooms, *as well as additional cosmetic improvements that have been done adding to the look and feel of the home, in other words, curb appeal.

Improvements that may help a sales price:

  • New paint job
  • Freshly maintained landscaping
  • Remodeled and/or upgraded interior
  • Deck and/or patio addition
  • Additional bedroom or bathroom
  • Addition to the lot size
  • Addition to the garage

Home improvements that best maximize your dollars

Any high ticket items that increase the home’s square footage. An additional bedroom or an additional bathroom for example increases the square footage, which in turn gives an appraiser more flexibility to make higher adjustments when determining valuation against the raw data (other sold houses in the area).
Refinancing: let’s say you have available funds for improving your home or improving your mortgage position. In most cases, possibly redirecting those funds for use in the loan transaction could benefit you in the longer term picture of holding that mortgage in keeping the property than doing an improvement when the savings generated by refinancing could be used to finance the home improvement anyway, not to mention the additional reduction in interest expense over time.
Selling In The Nearer Future: typically, it’s not a dollar for dollar recapture on the home improvement costs even when selling. Because the weight is given to improvements surrounding the facts (i.e. bedroom, bathrooms, etc.), it’s more common to expect approximately $.30 on the dollar. You may get higher cents on the dollar as a return on investment, but that is driven by heavily by the market. Because the market is the strongest indicator of price, market will dictate sales price followed by additional home improvements and marketing of the home.
If you are thinking about, refinancing your mortgage, or selling your house and need a recommendation to a professional real estate agent, contact Scott.Sheldon@nafinc.com today!

RELATED MORTGAGE ADVICE FROM SCOTT SHELDON

how to buy a home from family without needing any cash

How to buy a home from family without needing any cash

Have you ever considered buying a house from a family member? It’s a unique opportunity…

5 practical ways to increase your purchasing power when buying a home

How to avoid a contingent offer to buy a new home without selling your current home first

Buying a new home while still owning your current home can be a challenging process,…

Why you should wait for your credit to improve before applying for a mortgage

Why you should wait for your credit to improve before applying for a mortgage

In the current consumer landscape, securing approval for a mortgage is a significant challenge. It’s…

How to avoid getting a jumbo loan due to Coronavirus

New Mortgage Loan Limits for 2023

The Federal Housing Finance Agency announced on Tuesday, November 29th the new loan limits for…

View More from The Mortgage Files:

begin your mortgage journey with sonoma county mortgages

Let us make your mortgage experience easy. Trust our expertise to get you your best mortgage rate. Click below to start turning your home dreams into reality today!