Home Appraisal

Realtors® Rate Most Cost Effective Home Improvement Projects

Realtors® from across the country have rated several home improvement projects that will not only add value to your home but will also recoup most of their costs upon resale. The 2015 Cost vs. Value Report helps owners decide if a project is worth the time and financial investments.

Deciding to take on a home improvement project can be overwhelming for many homeowners, and especially if they are trying to choose a project that will give them the biggest bang for their buck. Realtors® know hat features will be most attractive to potential buyers and this report provides homeowners with that insight.

Curb appeal has always been important, so makes sense that the top five remodeling projects from the 2015 Cost vs. Value Report that will give you the highest return on investment are all smaller, exterior improvements.

Steel Entry Door. For the second year in a row, Realtors® have named the steel entry door the number one home improvement project when it comes to seeing a return on your investment. It is also consistently the least expensive project in the report, costing about $1,200 on average; it was also the only project on this year’s list to recoup more than 100 percent of its cost at resale on a national level.

Manufactured Stone Veneer. This decorative building material is made to replicate the look of natural stone for a substantially lower price. This is the first year manufactured stone veneer has appeared in the Cost vs. Value report. On average, the project will cost around $7,150 and will recoup 92.2 percent of your investment.

Garage Door Replacement. Upgrading your garage door can update the entire exterior of your home, not to mention enhancing curb appeal. The garage door is one of the first things a potential buyer will see. It is part of the first impression your home gives, so it is important that it looks its best. A midrange steel garage door averages $1,595 and will recoup you 88.4 percent of your investment.

Fiber-Cement Siding. This high-end siding is resistant to termites, rot, moisture and fire. It is also incredibly stable and does not flex, meaning you’ll save money on less frequent repainting. This project will average you $14,014, and you can expect a return on investment of 84.3 percent.

Wood Deck Addition. An outdoor entertaining space is a large draw for many buyers. A deck provides a large amount of living area and at $30 per square foot it is a fraction of the cost of an indoor addition. The average cost for this project is $10,048 and recover 80.5 percent of your investment.

Before taking on any of these projects it is important to remember that all real estate is local. According to the Greater Louisville Association of REALTORS, every neighborhood is unique and the popularity and resale value of a specific remodeling project varies from community to community. This is why it is so important to work with a Realtor®. Realtors® have unparalleled knowledge of local market conditions and can help you decide which projects will deliver the most return on investment in your area.

The 2015 Cost vs. Value Report is published by Remodeling magazine publisher Hanley Wood, LLC and is done in collaboration with the National Association of Realtors®. Additional data from the report can be found at NAR’s consumer website, HouseLogic.com.

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Louisville 2014 Home Prices up 2.7% with Slightly Fewer Homes Sold

With sales up 4.8% in December 2014 compared to December 2013, members of the Greater Louisville Association of Realtors® (“GLAR”) finished the year selling 14,486 homes compared to 14,775 in 2013 (down 2.0%). The year-to-date average and median prices were $180,200 (up 2.7%) and $147,000 (up 2.8%) respectively. The inventory of homes available for sale remained tight with approximately 11% fewer for sale than December 2013.

GLAR President Paula Colvin commented that, “members were actively helping homebuyers take advantage of low interest rates, which showed in the 25% increase in the number of contract signings in December 2014 versus the same month last year. Early data in January shows a positive trend continuing into the new year.”

At the national level, Lawrence Yun, Chief Economist for the National Association of Realtors®, recently remarked that even in the face of tight underwriting standards, today’s low interest rates have contributed to an increase in the share of first-time homebuyers to 31% (up from 28% in 2013). Recently reduced FHA mortgage insurance premiums and a 3% down conventional loan program should facilitate continued first-time buyer activity in 2015. Realtor.com recently spotlighted the return to normal price appreciation and the decline of distressed sales as positive trends in 2014. The same report also highlighted the ongoing challenges of limited inventory and the modest recovery in homebuilding, with new home sales comprising 9% of the national market compared to the longer term trend of a 16% share.

December-2014-Release

What is an Appraisal for?

Selling? Refinancing? Buying? Insuring? Each purpose factors in differently when determining your home’s value. 

Appraisals consist of many variables. If you are refinancing, the appraisal could come in under the original purchase price, because it is based around the price the house would currently sell for. If you are purchasing insurance for your home, the appraiser accounts for current costs of rebuilding and to find a fairly accurate value of your home.

 Also, when selling a home, keep in mind one of the most important factors – the market. Real estate agents and appraisers will attach a value to your home based on recent neighborhood sales, the current economy, and the value of the real estate. 

An appraisal is an approximate temporary value of your home. A sudden shift in the economy or a neighborhood house selling for above market value can affect your home’s value. Keep your information up to date to ensure you are getting the most out of your appraisal transaction.

 If you are unsatisfied with your first appraisal, seek a second. Each appraisal is not calculated down to the dollar, but is subject to the appraiser’s estimate of the value. Some appraisers may value landscaping highly; others, appliances. It can only help to have two values to compare the true value of your home, even if the cost of the appraisal comes out of pocket.

Use your local REALTOR’s expertise for more information on whom to contact and the best times to have your home appraised.

Understanding an Appraisal

For starters, you need to understand what an appraisal is, how it is being used and why it is being prepared. Appraisal values will differ for insurance purposes, market value assessment or a refinance.  

Having your home appraised is an estimate based on a variety of factors. These factors include nearby homes that have recently been sold and the features of your home such as fireplaces or new windows. On top of that, appraisers will have their own opinions; one may value certain features more or less than other appraisers.

When you’re applying for a loan, a home appraisal may come in lower than you expected. This is commonplace, as the appraiser is accounting for what it would sell for on the open market today, not what you have invested or the original price. 

In terms of insurance, an appraiser values your home against the current market for building supplies, labor and other costs if your home were to be rebuilt today.

 For real estate agents, the time frame of the sale and market experience is factored in to their appraisal.

An appraisal is also subject to change based on the current market. Your home’s value is connected to the economy, meaning a downturn there equals a drop in the value of your home. If your neighborhood has recently reclassified school districts, the appraisal has probably changed too.

One appraisal does not determine the exact value of your home. You can always get further quotes from more appraisers for different purposes or simply at a later date.  

The value of your home is subject to many variables; understanding the process will help you get the most value out of your home. Find information on appraisals, who to speak with and when by contacting your local REALTOR.