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Old 11-25-2014, 04:24 PM
 
Location: NC
9,346 posts, read 13,977,542 times
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So, for those of you with strong real estate experience, what is the maximum (%) that one might expect an over-improved, taste specific condo to sell for? Even if someone comes along who just adores the look, would they likely agree to pay full value?

Let's say that the seller spent 100K to remodel a 100K condo. Someone has said conventional wisdom would limit salable improvements to 10K, meaning the place might now be sold for up to 108K (80% return on improvements?). However, if no one likes the 200K unit, would they buy it for 108K? Or would they only want to pay 100K? Or would they be willing to pay 140K and sell off some of the taste-specific elements (sink, chandelier, whatever)?

Why not look at this honestly shared situation as a learning moment. The example could have been extreme Regency, Rustic, Industrial, anything. The real question is what can one expect? And what can one do about it?
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Old 11-25-2014, 04:35 PM
 
Location: Berkeley Neighborhood, Denver, CO USA
17,685 posts, read 29,640,200 times
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Default Not up to buyer

Quote:
Originally Posted by luv4horses View Post
what is the maximum (%) that one might expect an over-improved, taste specific condo to sell for? Even if someone comes along who just adores the look, would they likely agree to pay full value?
It is NOT the buyer's decision.
It is what the appraised value will be.
80% of buyers get mortgage loans.
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Old 11-25-2014, 06:18 PM
 
Location: Southern California
4,453 posts, read 6,774,523 times
Reputation: 2238
Quote:
Originally Posted by luv4horses View Post
So, for those of you with strong real estate experience, what is the maximum (%) that one might expect an over-improved, taste specific condo to sell for? Even if someone comes along who just adores the look, would they likely agree to pay full value?

Let's say that the seller spent 100K to remodel a 100K condo. Someone has said conventional wisdom would limit salable improvements to 10K, meaning the place might now be sold for up to 108K (80% return on improvements?). However, if no one likes the 200K unit, would they buy it for 108K? Or would they only want to pay 100K? Or would they be willing to pay 140K and sell off some of the taste-specific elements (sink, chandelier, whatever)?

Why not look at this honestly shared situation as a learning moment. The example could have been extreme Regency, Rustic, Industrial, anything. The real question is what can one expect? And what can one do about it?
$0 if it doesn't fit the neighborhood, that is why they call it Overimprovement. Mortgage lenders aren't in the business to lend you money to sell your house by parts.
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Old 11-25-2014, 08:24 PM
 
Location: Westwood, MA
5,037 posts, read 6,887,680 times
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Quote:
Originally Posted by davebarnes View Post
It is NOT the buyer's decision.
It is what the appraised value will be.
80% of buyers get mortgage loans.
If people can only buy up to what the appraised value is and the appraised value is based on what people have bought, how can prices ever go up? Either the remaining 20% drive the entire real estate market or appraisals reflect more than just comparable properties.
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Old 11-26-2014, 12:54 AM
 
5,075 posts, read 11,027,374 times
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Quote:
Originally Posted by Conon6 View Post
You either have it or not.


Oh and here's another example of a purple sofa (oh Jesus almighty!) and yellow chairs (oh sweet Mary)! How gaudy! Is this a brothel? Oh wait, no, it's so 100x better implemented than mine! I just got it all wrong, I'm sorry.
You're not seriously comparing your 1970's-80's econobox condo remodel to that magnificent place, are you?

Overall architecture matters more than finishes and furnishing. You can't make up for a complete lack of architectural detail by removing a few walls, putting up some wall paper and adding a purple couch. You end up with something akin to a dorm room with that approach.
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Old 11-26-2014, 07:25 AM
 
Location: Englewood, FL
1,268 posts, read 2,989,539 times
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Quote:
Originally Posted by jayrandom View Post
If people can only buy up to what the appraised value is and the appraised value is based on what people have bought, how can prices ever go up? Either the remaining 20% drive the entire real estate market or appraisals reflect more than just comparable properties.
Very good point! I think any property has a range of values, perhaps 10% up or down. If it's in worse condition than others it will be on the low end. If fully remodeled it will be on the high end. Buyers will pay more for a property that hooks them emotionally; the hook can be the curb appeal, renovations, decor, location, whatever. I *think* appraisers are willing to match the contract amount *if* that amount falls within the range. However, if the contract amount falls way above the accepted range (such as this property), the appraiser can't justify it and the appraisal will come in low. Buyers aren't idiots; they won't pay 100% more than the comps because they like the renos.
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Old 11-26-2014, 08:15 AM
 
1 posts, read 1,034 times
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This thread kind of went this way:

http://i60.tinypic.com/24xnsbt.jpg

I wonder why it's not locked yet.
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Old 09-14-2017, 03:49 AM
 
9,891 posts, read 11,704,117 times
Reputation: 22085
Quote:
Originally Posted by luv4horses View Post
So, for those of you with strong real estate experience, what is the maximum (%) that one might expect an over-improved, taste specific condo to sell for? Even if someone comes along who just adores the look, would they likely agree to pay full value?

Let's say that the seller spent 100K to remodel a 100K condo. Someone has said conventional wisdom would limit salable improvements to 10K, meaning the place might now be sold for up to 108K (80% return on improvements?). However, if no one likes the 200K unit, would they buy it for 108K? Or would they only want to pay 100K? Or would they be willing to pay 140K and sell off some of the taste-specific elements (sink, chandelier, whatever)?

Actually if sold at $108,000 it would not be a 80% return on investments. It would be a 92% loss to you on the improvements.

And no they will not want to pay $140K and sell off some of the improvements.

I know this is an old post, but I think some posters on different threads, need to see this, and understand it.

Why not look at this honestly shared situation as a learning moment. The example could have been extreme Regency, Rustic, Industrial, anything. The real question is what can one expect? And what can one do about it?
The $100,000 in improvements is really not worth much, as before they will buy that property for $100,000 more, they will go to a better quality neighborhood, and get a fancier unit with a fancier address.

And appraisers will use comps in the first properties neighborhood as their comps. They are not going to a $200,000 neighborhood to find comps. As I said before the three most important factors in valuing real estate, are Location, Location, and Location.

You have to realize, if people are going to pay a higher price they are going to a better neighborhood to buy. They are not even going to look at a property priced at $140,000 to $200,000 in a $ 100,000 neighborhood. Realtors will explain to buyers that you are way out of line price-wise and will not waste their time showing the property. The Realtor also realizes that they would be unable to find financing for the property for a buyer, at such a price. Lenders are not going to risk their money, knowing if the loan went bad, they would be out at least $100,000 when it is sold after foreclosure.

The one that loses when a vastly over improved property is placed on the market, is the one that over improved the property. Appraisers deduct from the going price of similar units in the neighborhood, if the property needc some care to bring it up to the value of similar units that have been sold. They do not take the comp price, than add for improvements, especially $40,000 to $100,000 for improvements.
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Old 09-14-2017, 05:09 AM
 
13,011 posts, read 12,985,869 times
Reputation: 21913
Old thread, but I got curious. It took OP three years to sell the place, but according to realtor.com it sold for $155k earlier this year.
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Old 09-14-2017, 05:53 AM
 
Location: Colorado
4,006 posts, read 2,684,702 times
Reputation: 7457
Quote:
Originally Posted by fishbrains View Post
Old thread, but I got curious. It took OP three years to sell the place, but according to realtor.com it sold for $155k earlier this year.
I wonder if the OP wound up 'neutralizing' the place to sell it or not.....
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