Home Selling in 61704>Question Details

Khushal Meda…, Home Seller in 28202

how to calculate fair market value of a house with lots of upgrades in this down market?

Asked by Khushal Medani, 28202 Wed Oct 13, 2010

would I get all that money I put in back by selling the home now? I put about 50,000 more after closing the home. I closed my house at 250K back in 2004. what are the good tips that can attract a buyer and get me that money back? what generally buyer and realtor of buyer look for other than original closing cost that is in this case 250K?

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Good question, I am sure many other folks out there have similar concerns. Fair market value is the price that a buyer is willing to pay for your home including all the nice upgrades you added to the home. Having bought the home in 2004, you are likely to have paid top dollar for the home, but of course, that is an assumption. All things being considered, you must evaluate you property versus the existing homes listed today, and the homes that have recently closed in your area.

One area of concern initially for me is what the appraisal will be for the home. Even if a buyer is willing to pay for your extras, you may have difficulty getting the home to appraise. Understand that this has become more of an issue in the past couple of years than we have seen in the past. You may want to have an independent appraisal done on the home to see if selling the home still makes sense for you today.

Of course, some improvements will increase the value of your home over others. Such as finished basements, additional bath rooms, and extra living space. Today's buyers are looking for great deals. The fact that you have made the improvements may well give you an edge on selling the home versus others in the neighborhood, but at what price. Hopefully you have an expert agent working with you to maximize the potential value of the home. Even with the upgrades you still need to do the little things to sell the home. Have the home in perfect condition and be ready to move quickly. These are factors people will look for and be willing to invest a little more for immediate occupancy and not having to make repairs once they move in. Good pictures and a strong marketing plan will hopefully get you the exposure you need to maximize your return on your investment. Good luck with the decision, we are all pulling for you on this one.
1 vote Thank Flag Link Thu Oct 14, 2010
Khushal,

I agree with most of the previous answers give in response to your very good question. But, on the comment made by one person, that we are in a declining market, I do not completely agree. There are price ranges that are still doing better than others and there are subdivisions doing better than others and there are styles of homes that are selling better that others. So... depending on what you have, where it is at and what improvements you made, you may or may not be able to recover some, all or most of you investment. The best suggestion I have is to get a professional Realtor, with a positive attitude, out to your home to give you a market analysis. That way you can make an educated decision as to whether you could, should sell, and at what price you should market your home at. Feel free to call me @ 309-275-4734. I have been marketing homes in the Bloomington Normal area for 25 years, and work with a team approach to selling Real Estate. I will be honest and straight forward with you. I would be happy to help you sell your home. If I can see the home, I can also let you know what you could do to make the home more attractive to the buyers that would be coming thru.
Web Reference: http://www.GZSellsBN.com
1 vote Thank Flag Link Thu Oct 14, 2010
Hello,

The only way to regain any of that is to market the home based on its upgrades that surrounding homes in the area do not have, and that doesn't always work out so well. Buyers today are more interested in the affordable home rather than the one with upgrades. If you purchased a home at an inflated price, getting that value alone could be very hard to do aside from upgrades to the home. Most of the time the return on upgrades is breaking even at best.
1 vote Thank Flag Link Thu Oct 14, 2010
Thank you for your question. I am sure a lot of folks are wondering the same thing. First of all, it is always the market that determines the ultimate value of a property...sellers and realtors just give it their educated opinion. To answer your question and to get your house SOLD, the best place to start is with comparable sales in the area. A realtor can help provide up to the minute data regarding listed homes, sold homes, and expired listings for a home s much like your own. Also, getting your house ready for market is very important because you want to be the competition! Houses that are priced fairly and look sharp sell first. Consider staging your home so that it makes a great first impression. Many folks are struggling with the reality that home prices are similar to 2003 and 2004. Best of luck in your home selling journey.
1 vote Thank Flag Link Thu Oct 14, 2010
Unfortunately, You purchased a home which at best was over inflated at the time, than made a decision to over improve that property. Currently our market is in a decline/depreciating mode in most price point ranges. If you do not have to sell at this time than stay put. If you must sell price the home according to the market demand and pick up your loses when you purchase your new home.
1 vote Thank Flag Link Thu Oct 14, 2010
Thank you for your question about getting the money that you put into your home back when you sell. Given that you purchased your home back in 2004 during the 'bubble' it is not likely you will get your money back, however, there are a lot of things that you can do to attract buyers to your upgraded home. There are many tips, tricks, and stategies that you can use at http://www.hgtv.com
1 vote Thank Flag Link Wed Oct 13, 2010
Do keep in mind that most upgrades don't always give you a full return. In order to determine value, one needs to be aware of comps--recently sold similar properties in the immediate area, after reviewing the data a determination as to value can be made--comps are provided free of charge by most agents--therefore consider contacting a few local agents from different realty offices and ask for a CMA--comparative market analysis--then go from there.
1 vote Thank Flag Link Wed Oct 13, 2010
Have an agent run a CMA for you. A Realtor can give you and idea of what you home is worth relative to what is going on in your market now...Agents/buyers will often look back at your purchase as a reference point, but things are not typically priced off of that purchase. Your value will be determined more so on what is occurring in your market right now with your upgrades factored in.
0 votes Thank Flag Link Thu Dec 9, 2010
Great question Khushai. One of the things you want to consider is the lender's perspective. When you are looking to sell your home, the question of value from the lender's perspective is typically left up to the appraiser. The appraiser will consider the upgrades that you have made and compare your property to other properties in your area that are apples to apples comparison. Your appraised value may be adjusted based on value, but you also have to take into consideration that at the end of the day, the neighborhood value is the overriding factor. Hope this helps.
0 votes Thank Flag Link Fri Dec 3, 2010
In a down turn market, upgrades help sell a property faster, but generally they add little value, unless the upgrades offer more than eye candy.
Web Reference: http://www.golftobeach.com
0 votes Thank Flag Link Thu Oct 14, 2010
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