Decade-old builder upgrades - how do they hold their value? (for sale, real estate)

[eirenecat]

We're looking at a house built in 2003 which is identical in floor plan and location (down the street, literally) to another house, also built in 2003, which recently sold. The house we are looking at is priced at $40-50k above any recent neighborhood comps, and $21 sq/ft above the identical house which sold a few months ago. It is not in move-in ready condition and needs a fair amount of reconditioning.

I don't think we're going to get anywhere with these sellers and their agent has been telling our agent that their price is based on the "builder upgrades" they selected a decade ago--somewhat higher ceilings, wider doors, and upgraded insulation. She feels that this warrants the $21/sq foot higher price, even though this house is otherwise in WORSE shape than it's identical comp twin--the entire thing needs repainting from the baseboards to the ceilings, landscaping done, the cabinets refinished, and the carpeting replaced.

I think they're all smoking something good, personally, and I'd be willing to bet it won't appraise for anywhere near the price they're asking. I'm not a realtor (and our realtor is newer in the field) but just wondered if decade-old builder upgrades really held their value that way.

[ScoPro]

The higher ceilings & wider doors certainly are a big plus, but the extra insulation in the attic may have settled (if it's the blown in kind).

Repainting an almost 10 year old house is a given, and maybe the recarpeting too.

But those original upgrades aren't really worth anywhere what the seller claims, IMO. In fact they should deduct a considerable amount as an "allowance"" to cover the renovations you'll need to do to bring it up to snuff.

But the real estate experts here will undoubtedly give you better info.

[CarnivalGal]

The upgrades you mentioned are structural as opposed to cosmetic, so they will add more value than say the cabinets that were in style 10 years ago but not now. But that does sound a bit high.

If you aren't willing to pay what they are willing to accept then just move on to another house. You can't force the seller to take a lower price just because you think they should.

[Trainwreck20]

Originally Posted by mm57553

If you aren't willing to pay what they are willing to accept then just move on to another house. You can't force the seller to take a lower price just because you think they should.

^That - it doesn't really matter WHAT you think the seller should price the house at, it is what the seller thinks they can get. Here is the real question - are there any other houses like this one for sale at a lower price in the area you are looking for? No? Then this is the cheapest out there. The on that sold down the street is pretty much irrelevant unless it goes up for sale again at a cheaper price. Maybe they under-valued it by $30/ft, who knows?

Anyway, don't worry about why someone thinks a price is appropriate, decide whether you want to pay that much or not.

[eirenecat]

The seller is obviously not getting the price it's priced at, as it has sat for months with no offers. I'm not willing to pay the price they're asking--and clearly, neither is anyone else. I was asking whether or not those kinds of upgrades a decade ago held their original purchase price values in terms of appraisal value. If anyone knows the answer to that, I was interested in that specific information. Thanks!

[buffettjr]

Originally Posted by eirenecat

The seller is obviously not getting the price it's priced at, as it has sat for months with no offers. I'm not willing to pay the price they're asking--and clearly, neither is anyone else.

Well you just answered your own question. Opinions of a few people on a forum don't matter, the market tells you what the value of everything is. The house has sat for months with no offers...that tells you the house is overpriced and the builder upgrades do not, and have not held their value. If the market isn't respecting those upgrades, an appraisal certainly will not. The house is overpriced and there is no room for argument on that. If it weren't, it would have sold already in this ultra hot market. The only thing you can do is go buy an identical house from someone else cheaper or wait a few months until the seller realizes they are not being realistic and actually needs to sell and must lower their price.

[Eastcoasting]

In a more abstract sense I'm trying to imagine what type of decade old builder upgrades would hold their value. With typical wear and tear most cosmetics would be tired, insulation would be hard to quantify for various reasons.

I suppose wider doorways and higher ceilings would have some value if they were absolutely unique in the neighborhood.

Other than that, full brick/stone exterior, tile roof, extra garage bay or "premium" lot is about all I can come up with, really just about the bones of the house.

[centralaustinite]

Lot premiums usually don't hold their value either!!

OP, what kind of appraisal are you thinking about? I think you are imagining something more extensive than what most banks do (and their opinion is the only ones that count). Sometimes the banks let a computer algorithem do the valuation, other times, they send someone out and measure the exterior to make sure the footprint sq feet is correct, very VERY rarely do you get anyone inside the house looking at finishes etc.

Make an offer, see what they say.

[RoadWarrior12]

Originally Posted by Eastcoasting

In a more abstract sense I'm trying to imagine what type of decade old builder upgrades would hold their value. With typical wear and tear most cosmetics would be tired, insulation would be hard to quantify for various reasons.

I suppose wider doorways and higher ceilings would have some value if they were absolutely unique in the neighborhood.

Other than that, full brick/stone exterior, tile roof, extra garage bay or "premium" lot is about all I can come up with, really just about the bones of the house.

Yeah - the only things that really add value are structural. Everything else is a depreciating asset that will not hold value.

[CarnivalGal]

Originally Posted by eirenecat

The seller is obviously not getting the price it's priced at, as it has sat for months with no offers. I'm not willing to pay the price they're asking--and clearly, neither is anyone else. I was asking whether or not those kinds of upgrades a decade ago held their original purchase price values in terms of appraisal value. If anyone knows the answer to that, I was interested in that specific information. Thanks!

That's impossible to say without actually seeing the house. It's may very well be that the seller is expecting way too much money for the house. But it's also entirely possible that the seller doesn't really need to sell and will just pull it off the market if he doesn't get the price he wants rather than take a lower offer.