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Value of Home Addition

Did Your House Shrink?

Many different numbers relating to the Gross Living Area can be floating around out there for the same home built fifteen years ago, that has sold 3 times.  Tax records, the MLS database, and past mortgages filed at the courthouse may vary in some degree.  Additionally, some Real Estate Agents may copy an old listing that had an incorrect square footage and it just gets carried on, and on, and on.  Not that the Real Estate Agent was trying to do anything unethical, but human error happens; it was raining, she was in her good shoes, etc. Now, now, I am just kidding. My wife is a Real Estate Broker and would kill me if she heard me utter that out-loud.  All kidding aside, I have the highest respect for all of us that work in the Real Estate Industry, especially in today’s trying times.

Here is the short of it all, if the numbers are off by a small amount, of say a few square feet, that is very different to an Appraisal than if these numbers differ in the hundreds of square feet.  Fortunately, we do not encounter too many homes shrinking over the years, but you would be surprised how many tend to grow.

Addition-ally

Certainly, many homeowners have made additions to their homes that do increase their GLA. This can be a tricky area though because there is a strict set of guidelines set forth that define what is, and what is not considered living area of a home.  Not all additions will pay for themselves in resale value but will indeed pay for themselves in your family’s enjoyment.  I encourage anyone with a question before they begin an addition, to give me a call.  Let me discuss with them what will and what will not add to their GLA.  Also, a value can be added even if it is not in the GLA calculations, and we do take that into consideration. I am going to touch on just one type of addition in this post, one that is near and dear to my own heart.  The mancave!

All the Fellas in the House Stand Up!

Wait, you can’t stand up? That is a clue that area might not cut it in GLA.  Let’s say you finally get convinced to finish out that attic making it a man cave the fella’s cannot leave.  Yes, being able to keep your husband and his fellas upstairs playing foosball in a nicely finished attic addition is a value all its own, but not always in the GLA. It still may have more value than the home down the street, that just threw up some plywood and called it a man cave, agreed.  Here is the short of it, for lack of a better term, that addition will only count in your GLA if it has a ceiling height of at least 7 feet, and a minimum of 50% of the ceiling must be at 7 feet to be considered.  Nothing under 5 feet at the slope will be considered in your GLA. Your husband is only 4’10 you say? Then it will work great for him, but still not counted in the GLA, no matter how many SEC logos are embedded into the fixtures.

 

 

Home Value

The Cost of Preparing Your Home for Sale

The obvious costs of preparing your home for sale can range from a few hundred dollars to a few thousand dollars.  Let’s assume for this article that you have decided to sell your home without the services of a professional Realtor®. Cleaning and decluttering is the obvious first step in preparing your home for sale.  Repairs, marketing and time off work to show your home will also add up.  The last thing you want to happen is that you have priced your home too high, or too low.

If you have decided to dip your toes into selling your home yourself, knowing your homes True Market Value is undeniably the most important first step.  Know the Value Before the Price. We hear too many times that “my neighbor sold his home last year for 265,000 so I know mine must be worth more than his was”, “I mean I have the NICEST home in the neighborhood”.  Now both statements may be true, but you could be setting yourself up for disappointment if you do find that you have overpriced, or even worse, underpriced your home.

Pricing Yourself Out of Sight

Many homeowners jump into the market feet first, with list prices that price themselves far from ever being seen by potential buyers.  At no fault of their own, they rely on what their neighbors “say” they received for their homes, or eager Real Estate Agents vying for the listing tell them it can be sold for. You cannot price your home based on these sources, at least not these sources alone. Overpricing your home will keep potential, qualified buyers from ever scheduling an appointment to view your home as a possibility.

The Sale Derailed

The most troublesome result of overpricing is contracts that fall apart days before the closing.  Unless your buyer is paying cash, which is rare in today’s real estate market, they will have a lender from a bank, credit union or mortgage broker.  That lender is going to have an appraisal done to protect their institution from losing money if the buyer does default on the loan.

Leaving Equity on the Table

Not as traumatic, yet still will haunt you, is the cash you leave on the table if you underpriced your home.  You have no idea what the Buyer’s appraisal comes in at because it is the property of the Lender or the Buyer.  The appraisal belongs to the person or institution that ordered it, and you will 99.9% of the time never see it.  Especially if the appraisal comes in tens of thousands of dollars above the contract price.  You will be at the closing table with more than cheerful buyers and you signing away equity that could have been yours.  Sure, it is great to give someone a good deal, but a good deal does not have to mean you lose a sizeable amount of money that was your equity, to begin with.

The Pre-Listing Appraisal is the Answer

The cost of a Pre-Listing Appraisal is minimal to the costs involved in the scenarios above.  It will give you the true value of your home, and the documentation to back it up.  When a buyer see’s “Home Appraised at 2k above List Price” in the advertising, they will be beating down the doors of those listings.  Realtors® tell us daily that they advised their client to get a Pre-Listing Appraisal to aide them in marketing their property.

Don’t risk what is most likely the biggest investment of your life. Breaux & Associates APPRAISERS can provide you with a Pre-Listing Appraisal at a fair price, and in a timely fashion. You will be able to speak directly to an Appraiser and get answers today.  Our Certified Appraisers do one job, and that is Appraise Homes.  Certified & Experienced. We will be able to get you scheduled within the week most times and get your Appraisal back to you within days of the inspection.

You can reach Mr. Breaux directly at 225.715.3476 or Email at kirk@breauxappraisal.com.  We look forward to assisting you!