What’s it worth? 3 questions about value-boosting home characteristics
Of the many questions we field from homeowners thinking of selling their homes, the most frequent starts with “What’s it worth?” Of course they’re referring to their home’s value, but even after that is determined, the “What’s it worth” questions continue. Following are three of the most common questions about items that may, or may not, add to a home’s value
What’s a view worth?
We typically get this question from a homeowner who just found out that his home with a gorgeous view is worth less than he thought. If two homes are identical and only one of them has a view, it’s a safe bet that the one with the view will be worth more.
How much more? It depends on who you ask. Some real estate professionals claim there is no value in a view, yet others claim that the view may increase the home’s value by up to 15 percent over similar homes that lack one.
Texas Christian University’s Mauricio Rodriguez, PhD and C.F. Sirmans of Florida State University studied the topic and found that, at least for the housing market they examined, “a good view adds about 8% to the value of a single-family house.” (Rodriques/Sirmans: Quantifying the Value of a View in Single-Family Housing Markets)
Since the final determination of a home’s market value is decided by the appraiser, we went on a hunt for an appraiser’s opinion. Michael Fox, a New York State Certified Residential Appraiser with MF Appraisals in Westchester, conducted his own, informal study of the value of a golf course view.
He analyzed 4 years’ worth of sales in a townhome development and found that the golf course view was worth from nearly 6 percent to 6.85 percent, depending on the year the home sold. “Throughout the marketing of the project, regardless of changing market conditions, buyers paid more for units with a view of the golf course.”
Whether the view is of the city skyline, water, open space or a golf course, it is worth something. What’s lacking is a consensus on precisely how much it’s worth.
Will a pool add value to my home?
Oh, this one is popular. Thankfully, it’s easier to answer than questions about the worth of a view.
The National Association of Realtors’ National Center for Real Estate Research claims that “. . .an in-ground swimming pool adds about eight percent to value” and that “an above ground pool adds no value.”
The National Association of Homebuilders, however, finds that, of homebuyers who expressed a desire for a pool, most said they would be ok with a community pool.
Again, real estate value comes down to location. The value of a pool depends a great deal on where the home is located. Buyers in warm regions tend to put more value on them than those in our country’s cooler areas. So, yes, a pool adds value to a Phoenix or Las Vegas home but may not add a penny to a similar home in Minneapolis or Omaha.
In fact, the National Association of Realtors study we mentioned earlier finds that Southwest homeowners with a pool can realize an 11 percent bump in value (unlike the eight percent for homeowners elsewhere).
For any pool to be considered valuable it needs to be in good condition, otherwise, it may actually drag down the home’s value.
Which renovations will boost my home’s value the most?
Keep in mind that any renovations you make to the home will only pay you back, on average, “64.3 cents on the dollar in resale value,” according to Remodeling Magazine’s 2017 Cost vs. Value Report.
That said, the projects from which you’ll get the most bang for your buck, according to the report, include:
- Replacing attic insulation – A contractor air-seals the attic floor to stop air leakage and then adds fiberglass insulation to a thickness equal to R-30 insulation. This project pays for itself, according to the magazine’s report – returning 107.7 percent of the cost when the home sells.
- Front door replacement – Ditch the old door and replace it with a steel one. It will cost you about $1,400 (national average) and you’ll recoup 90.7 percent upon the sale of the home.
- Minor kitchen remodel – This project involves replacing the cabinet and drawer fronts and adding new hardware; replacing the appliances with energy-efficient models; installing new laminate countertops; installing a new sink and faucet; repainting trim, adding wall covering and replacing the flooring. Total cost: $20,830 and the homeowner will recoup 80.2 percent of that after the sale.
Since kitchens are so important to buyers, we dug deeper into this facet of home renovations. Consumer Reports finds that millennial homebuyers overwhelmingly want a “modern/updated kitchen” The group goes on to suggest that for a mere $5,000 you can add new appliances, countertops and flooring and splash some fresh paint on the walls and realize a 3 to 7 percent bump in home value.
Anything you do to the home that helps save on energy bills will be popular with buyers. This includes replacing old windows with high-efficiency versions, replacing utility-hogging appliances and the aforementioned beef-up of the home’s insulation. The Consumer Reports study claims that replacing old windows with “Energy Star certified windows can lower your home’s energy bills by 7 to 15 percent.”
Now THAT is a hot selling point!
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