improvements and appraisal

Guest

Hi, 4 years ago, my Victorian home was appraised at 205,000. then 3 years ago we had a fire and it was mostly to the basement, but we took advantage of doing a lot of work while it was being repaired. We replaced two furnaces, and water heater (needed it because of the fire), plumbing, electrical, put in two energy efficent windows, replaced three lamanate floors with wood, refinished all the wood floors, repainted the entire interior, replaced all the appliances with new, and put in all new window treatments that are all historic (ouch.. $15,000. just for the window treatments!), and refinished two wooden decks. Also complete redo of interior design. And now we want to repaint the porch and wood trim on our home and re do the landscaping so we are refinancing our home and need a new appraisal. Given all that work we did since the last appraisal, will our new appraisal be higher?

gmakerley · Posted: Thu Jul 09, 2009 7:27 am Post subject:

sunshine, all you're going to get on here is speculation.

that being said, with all of the work you've done, we will all agree, i am sure, that there will absolutely be a higher appraised value based on all that work.

on the other hand, we don't know where you are, or what kind of real estate market is in your area, nor do we know if there are other things that might work against you in your attempt to achieve maximum value.

you can certainly go to locales like zillow.com or trulia.com to get estimates there on a current value, or check with a local real estate agent, but the truth of it is that you'll need a new appraisal to know the real answer to your question.

Guest

I forgot to mention, I also started a B&B in this home. Now that it is also an income producing (we still live here too) will that also change the appraisal?

gmakerley · Posted: Thu Jul 09, 2009 8:15 am Post subject:

your property is now going to be considered mixed-use (part residential/part commercial). that will affect the appraised value, also, since an appraiser would now need to seek out other mixed-use properties with which to compare yours. it's more complex now.

Guest

Yes, but will ilt affect it for better or for worse?(higher value or lessor value)?

apexoffice · Posted: Thu Jul 09, 2009 9:03 pm Post subject:

Sunshine,

Like George said, it would be speculation for anyone to give you a straight answer. Under normal market conditions, improvements to a property will likely add some value. However, you also have a few things which could hold you back. First of all, a fire can sometimes stigmatize a property as from this day forward, you must disclose it in the seller disclosure statement to future buyers. Also, many real estate markets have taken a very hard hit over the past couple of years. Depending on your location, there may have been a significant drop in property values.

Changing the property to a B&B really changes the dynamic of the appraisal assignment and you can easily expect triple or more the cost of an appraisal from what you previously paid.

To find out for sure how all of these factors have affected your value, you will have to get an appraisal done by a local appraiser.

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