Repairs can help with home valuation to refinance or sell

Posted by Tom Kalinski on Monday, July 8th, 2013 at 1:49pm.

Property values are on the rise and many homeowners can now refinance their loans with additional home equity, according to Credit.com. Increased property values can also put them in a better financial position to sell their home without entering short-sale territory, but everyone still wants to attain maximum value for their real estate.

Home repairs can help with that.

The best barometer of a home’s true worth is what a ready, willing and able buyer is willing to pay at any given point in time. But appraiser’s estimates can be skewed, especially when not all the home repairs and improvements are considered. This is why homeowners should weigh all home improvement decisions carefully before they commit to any repairs.

Improvements that may help a refinance valuation:

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

When it comes to improvements such as landscaping, painting or any home improvement more “cosmetic” in nature, the primary benefit is for the enjoyment of the property, not to influence value.

Improvements that may help a sale 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

The improvements that will garner the biggest bang for the buck include those that increase square footage. An additional bedroom or an additional bathroom increases the square footage, which in turn allows an appraiser to make higher adjustments when determining valuation against other comparable homes around the subject property.

Refinancing

If homeowners are content in their homes and plan to stay a while, they can use funds that would have gone toward home improvements and their own enjoyment for a refinance. Over time, they can put the money they saved from refinancing toward those home improvements in the future and benefit more.

Selling in the near future

Homeowners typically won’t recoup dollar-for-dollar what they spend on home improvements when selling. Because the weight is given to improvements that expand the use of the house (i.e. bedroom, bathrooms, etc.), it’s more common to expect 20 cents on the dollar, or maybe 30 cents on the dollar, depending on the improvement in such a scenario. Because the market is the strongest indicator of price, the market will dictate sales price followed by additional improvements and subsequent marketing of the home.

Source: Credit.com

 

 


RE/MAX of Boulder, INC
303-441-5620
tomkalinski@mindspring.com

Print

Leave a Comment