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An owner of a property in the historic district of Dallas known as the
“M” streets was seeking an appraisal in conjunction with a refinance
and a home improvement loan. The home was built in 1932 and the
value of the homes in the neighborhood varies greatly according to
updates, condition and other factors. Prices ranged from maybe
$150,000 to $350,000 and in some cases more. This is quite a range
and presents a challenge for Real Estate experts and appraisers
alike.
One of our experts was contacted to pull comps to contest the
appraisal because they were seeking the highest possible value. They
explained that due to portions of the home having unfinished
projects their appraisal value was significantly less than they
thought it should be given. There were plenty of comparable sales to
support another $20,000-$60,000 in value in a good condition.
In this home valuation good condition was the key here. A home that is not in top living
condition in all areas of the home will not command full value. With
unfinished rooms and unfinished projects a projection of 10’s of
thousands of dollars in some cases must be allowed to bring those
issues to top condition.
An area of attic that had been converted to closet space which
amounted to a good sized room off of the master bedroom was not
allowed square footage because the ceiling was such that it allowed
only limited walking area.
The kitchen had had a complete renovation with very expensive
granite
counters, leaded glass, built in refrigerator, and solid oak cabinets paying
attention at the same time to the historical themes and constancy of
the period. These types of upgrades such as the granite counters and
solid oak cabinets should be considered carefully because when it
comes to valuation you may not get back out of these types of
upgrades the full value of them. These types of things
did little to offset the areas of the home still in the project
phase and the overall condition assessment.
The exterior of the home also
were factors in the valuation the main being it was frame
construction. Brick homes generally as a rule will increase the
value by huge margins sometimes over comparables of the same size
and age. The Garage was original and is standing but in need of
repair. This appraiser even accounted for non essential
items stored on the property and this would be a consideration is
this old neighborhood as “cleanup” that would be required.
This is also the same home
valuation
process that the Real Estate expert does is look through those
critical buyers eyes. The “carpet allowance” is an example. You are
better off replacing it with cheap carpet that looks good than
flagging it that it needs things by giving allowances. Most buyers
don’t want to move in and begin work. A new home should be a new
home and in top livable condition and this is what will command your
top dollar price.
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