Valerie Grijalva, Vice President of Resale/Outsourcing REO Services at Chicago Title, just sent me this information on how various upgrades add to the value of your home. This is an interesting read and can help you make remodeling decisions.
The following are examples of common improvements and how they may increase the appraisal value of your home. These are only guidelines; please remember the adjustments may vary greatly from property to property and neighborhood to neighborhood. These statements were provided by Huber Appraisal, Inc., who remind you that the statements are intended only as general guidelines.
Living Area: $30 to $75 per square foot, depending on construction quality (please note: this reflects adjustments for square footage ONLY. It does NOT reflect total sales price per square foot.)
Two-Car Garage v. No Garage: $6,000 to $10,000, depending on price range of home. Two-Car Garage v. Three-Car Garage: $5,000 to $10,000 depending on price range of home.
In-Ground pool/spa: $12,000 to $60,000 with $15,000 to $25,000 being used for most neighborhoods (the amount used depends on how common they are in the area, and the price range of the neighborhood. For example, a $60,000+ adjustment would be most appropriate in a neighborhood with market values exceeding $500,000.)
Lot Sizes: $2 to $5 per square foot, depending on the neighborhood. Covered Patios: $2,000 to $5,000, depending on the patio size & quality (higher figures may be used for large
custom homes.)
Fireplaces: $1,500 TO $2,500
Basements: According to appraisal standards, the square footage of a basement must not be included in overall square footage of the home. A basement is measured and valued separately, even if it has a finished interior. The adjustment for a square footage should be slightly lower (perhaps $5/sq. ft.) than for that of the area above ground, and the amount of the adjustment varies on the quality of the finish.
Number of Bathrooms: $1,000 to $2,500 per additional bathroom regardless of size.
Security Gates: Electronic gates can add $5,000 to $15,000 while manned gates can add $15,000 to $50,000 in value. Full Landscaping v. None: $10,000 (standard lot) to $25,000 (more than 1⁄4 acre), depending on size.
Views: Must be calculated on an individual basis.
Remodeling, Builder or Owner’s Upgrades: These can be dealt with only on an individual basis. Dollar per dollar adjustments will not be accepted by most underwriters. Typically, kitchen and bathroom remodeling projects recover most of the original amount of money spent. If completed professionally, these improvements may recover up to 75% of the expenses incurred. Remodeling of other areas of the home usually recovers 25% to 30% of the incurred costs. Upgraded options selected from the developer of a new home typically only recover approximately 25% to 50% of the costs incurred. Lot premiums also typically fall into this percentage range.
