A person buys a home for market value Say 58,000. Puts $8000 in repairs . Is the market value still $58000?

Asked by Doug, 85392 Tue Oct 25, 2011

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Loren Hoboy’s answer
Loren Hoboy, Agent, Phoenix, AZ
Thu May 31, 2012
These answers you got are all valid, but miss one point. The best resource you will have is your listing agent to help you estimate the current market price of your home. In Avondale 85392 , home values for most homes in this price range have risen in the last few months by 20% . Move in ready homes are commanding a higher price. Homes in you stated price range are almost impossible to find. You will see lots of interest.

0 votes
Don Tepper, Agent, Burke, VA
Tue Oct 25, 2011
It depends.

It depends on what the house was worth when you bought it. And it depends on what repairs you did.

Regarding market value--what it was worth when you bought it--recognize that that isn't a precise figure. But, for the sake of argument, let's assume that it really was worth precisely $58,000.

Presumably, that $58,000 reflects the problems that the repairs fixed. For example, perhaps in nicely fixed-up condition the house would be worth $65,000. But the roof leaked. The driveway was cracked. One toilet was broken. And so on. All of those things would discourage some buyers, so the price was reduced to $58,000. Now, if that's the case, then making repairs could bring the value of the home up to $65,000--where it would have been if everything had been in good condition.

On the other hand, if you bought the home for $58,000 and figured everything was in good shape (or it was in good shape when you bought it), but then the HVAC failed, the hot water heater started leaking, the roof started leaking, etc.--then doing $8,000 in repairs doesn't add a penny of value. That's because, when people buy a house, they expect the HVAC to work, the hot water heater to work, and the roof not to leak.

If you're talking about remodeling--rather than repairs--the answer is a bit different. Some things will return more than their cost--not many, but some. For instance, if you have a 3 bed/1 bath home, adding a second bath can add a lot of additional value and help the property sell quicker. On the other hand, some "upgrades" add little or no value. Adding a hot tub, for instance.

Hope that helps.
0 votes
, ,
Tue Oct 25, 2011
It depends on what you do, I had a client purchase a home, spent $50,000 on re-hab and then tried to refinance, it appraised for less than she bought it for. Her personal changes made the home somewhat obsolete.
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Tim Moore, Agent, Kitty Hawk, NC
Tue Oct 25, 2011
It could be less or it could be more. Some repairs add more value than they cost, hardwood floors as an example. But somethings add less than they cost, a new door might be an example.
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BG, Home Buyer, Phoenix, AZ
Tue Oct 25, 2011
It should be some where in between 58K and 66K .... some repairs add value, some don't ....
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Anna M Brocco, Agent, Williston Park, NY
Tue Oct 25, 2011
Much will depend on current market conditions; therefore for a picture of worth, contact any local agent/s and ask for a cma, comparative market analysis, see what the data suggests, ask opinions and go from there...
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Gregorio Den…, , San Diego, CA
Tue Oct 25, 2011

1. To restore to sound condition after damage or injury; fix:
2. To set right; remedy

You said "repair" not "improve". By definition value would be the same in a best case scenario and possibly less based on the need for "repairs."
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