Increasing property value: Often worth the trouble and investment
By Jim Hagerty
Monetizing a home, especially during the aftermath of a crashed real estate market, can be a monumental undertaking. Because of the rash of foreclosed properties in the last few years, real estate values have tumbled to record lows in certain areas. This has presented several problems for homeowners who once had considerable equity in their properties. Some are underwater, owing more on their homes than they are worth. Other property owners are simply in need to sell and get every penny they can.
While increasing the appraised value of a home can be a slight challenge, it can be done legally without involving a real estate agent or an appraiser, especially in the early stages. Some homeowners find it makes sense to go through the trouble to protect, or in some cases, create, home equity.
→ Examine a list of comparable sales in your area. If you can, get a list of homes for sale or homes recently sold within 1 square mile. These lists can be obtained from a Realtor or appraiser if they are willing to give them to you. Examine these homes and take note of the number of bedrooms and bathrooms, finished basements, updated appliances and square footage. Note their sales prices and compare the properties with your home. If there are open houses, visit them to get a firsthand look at similar homes.
→ Increase your square footage. While often difficult because of cash flow restraints, an addition is sometimes a sure way to increase a property’s value. Contact a remodeling contractor and get an estimate on an extra bedroom, enclosed porch, bathroom or other addition. Converting an attic or basement into livable space (providing correct windows are installed) are also sure ways to increase your appraised value.
→ Update appliances. Slight increases can often be made to a home’s value with the addition of modern, energy-efficient appliances, roofing materials, light fixtures and bathroom tile. Most of these upgrades can be made with little investment and without the aid of a contractor.
→ Beautify the home’s exterior. Make sure your lawn is neatly landscaped and mowed, especially if you are selling or have an appraisal scheduled. Paint your gutters, downspouts and exterior trim, covering chips and dings. If your budget allows, adding or enclosing an entry porch, attaching your garage to your house and adding trees will also make your home more appealing from the street.
→ Be present when the appraiser inspects your home. Because appraisers are often asked to only arrive at a value equal to a sales price, they won’t attempt to reach maximum value unless requested to do so. As the appraiser walks through your home, point out updated features, such as appliances, or any improvements you’ve made.
From the July 21-27, 2010 issue