What’s your home worth? Do you know? These days we can go online and get home values without much trouble. So, what’s the big deal about a professional appraisal for your remodel? Well, allow me to shed some light on this.
What is a Professional Home Appraisal?
First, let’s be clear about what I’m talking about. When we want to get a loan on a new purchase or a refinance of our home, the banks want an appraisal. So, they call an appraiser.
An appraiser is a licensed real estate professional trained to analyze home values. They don’t establish values, they research, inspect, and report on values. Is it an exact science? No. But, they come as close to an exact value as is possible in any given market situation.
The values they report are reflections of what the current market is willing to pay for the particular home they are evaluating and assessing. Your local professional appraiser is knowledgeable about your neighborhood, aware of how the homes are built and their costs, what amenities (or goodies) the homes have, and what people are paying for them.
From this information, they establish a close approximation of the current market value of the home they inspect. Thus, you have an appraisal.
How Does an Appraisal Help You, the Remodeler?
The smart homeowner preparing to remodel, will never spend money that doesn’t provide value to their home. Doing a costly home improvement that attempts to create value well in excess of the neighborhood values is unwise. Would you spend $50,000 on a home improvement that only added $10,000 to your home’s value? Of course not.
Over the years, we’ve learned that people don’t care what you paid for something, they care most about getting the best deal and paying the “going rate” for the market they’re looking at. They’ll “pay more to get more,” but, usually only if the home is located where everyone else is also paying more … like upscale neighborhoods. It’s just a fact of life.
Getting a professional appraisal before you begin remodeling can tell you how much extra value potential there is in your home. It will often be able to give you a very strong indication of what a specific proposed improvement will do for your home’s future value.
Striking a Balance
If you haven’t had a professional appraisal done in the last year or so, get one before you complete your home improvement planning. You’ll see first hand what other homes have and how it affects value. It’s just a part of better preparation. It makes you a smarter homeowner when it comes to important home improvement decisions.
You may have to strike a balance between what you want and what the market will bear. On the upside, you may find you can do more!
Tags: Home, Home Improvement, Home Remodel, Homes, Remodel, Remodeling, Remodeling Project
