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For example, highest sold in my neighborhood is 220k which had no upgrades. Other comps are similar to that.
If I upgrade my identical home, let say new kitchen, hardwood floors, tile bathrooms, etc. Will my house appraise for 240k or is the highest recently sold comp the max it will appraise for regardless of upgrades?
Side questions: My house has an un-permitted 500 sqft addition in the back. Will the appraiser consider that or will he just go by the original/permitted sqft?
Unless one is dealing with identical spec homes (or condos), comps are only a similar comparison. They have a bearing on how much a home is listed for, but, only a general relevance to what someone may be willing to pay for a home.
Condos and spec homes are a little different, since one can make an apples to apples comparison. In those cases, upgrades will be easier to quantify, but not necessarily recoverable unless they hit the buyer's sweet spot.
.......Side questions: My house has an un-permitted 500 sqft addition in the back. Will the appraiser consider that or will he just go by the original/permitted sqft?
The appraiser will not count that unpermitted addition, and it is very likely that any buyer will expect you to either get it permitted, inspected, and finaled, or else rip it down.
I would never pay for an unpermitted addition. It's not legal and the city can decide to make you remove it if they decide that is what they want to do.
In fact, I just looked at a house that suited me perfectly except that they had built an unpermitted apartment in the shop. It was obviously not inspected because the workmanship was so shoddy. I considered the cost of removing the apartment and decided to keep looking for a house that was fully legal.
Unpermitted addition bad and, as was said, you may have to come out of pocket to get it to code or to tear it down and cart if off.
Very often upgrades will not necessarily get you more. But they can get the house sold. And sometimes before anyone else's.
That said,if you did some work yourself or if you bartered with a skilled friend you could make more from the house.
And that said, when the other homes like yours are $220,000, there is only so much more a buyer will spend to live in the same house even with some newer stuff....without going to look at other homes in the $240-250k price range.
The only one who will benefit from your upgrade will be the agents. Your listing agent is not on your side. Your just giving the agents a higher commission.
Really depends on the upgrades. For example my neighbor is selling his house. 520,000. He has hardwood floors but everything else is just been painted. Same 1980 kitchen.
My house is right next door. Identical house literally.
But my house is a complete remodel. Kitchen cabinets with pull out drawers additional peninsula, countertops, bathrooms, custom vanities (to fit in the same space as before, new carpet, paint, finished garage inside.
You can't tell me the houses are worth the same amount. One hasn't been remodeled since 1980 one was remodeled recently.
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