We have previously discussed some of the challenges you, as a new homeowner, encounter when striving to increase the value of your home over time. So much depends on appearance — the structure itself, the grounds, the adjacent neighboring property, the general neighborhood and the community overall. The setting alone greatly influences perceptions of value.
While we all know the adage: Don’t judge the book by the cover, we often do just that. The general perception of value is probably 50 percent presentation and 50 percent arithmetic — and perception of value is 100 percent subjective. The external presentation of property carries a lot of weight and determining its value is connected to its neighbors.
Going inside the house and considering ways to increase the overall property value through internal improvements presents very specific considerations. Some improvements are made for convenience, some for fun, some to accommodate special needs or requirements; others may involve trends. So, it’s also important to look at your motives when making certain improvements.
All things being equal concerning external presentation, there are benefits and risks when making changes within and connected exclusively to the home itself. If you have no plan — even remote — to move, and your improvements are solely personal to your own taste and appreciation, then, enough said — a lot of benefits and little or no risk.
It is quite another matter when the motive for internal improvements, additions, and other changes in the hope of significantly higher value because you intend to sell. That’s where it becomes very important to know what is happening in your immediate neighborhood, the greater community and your Residential region’s property value patterns.
“Over-improving” to the point where it might be questionable for you to recapture significant expenditures at resale, is a serious issue. Professional guidance, authentic statistics, and dependable value projections are available to you to achieve your intentions and avoid serious financial errors.
Some internal improvements are greatly influenced by one’s own personal tastes and preferences! And, that’s fine if you
do not intend to sell. Otherwise, that might be a mistake. It won’t hurt to consider the best choices from the perspectives
of those in the know: residential architects and interior designers, general contractors and experienced real estate
agents. They will be well informed concerning what home buyers are currently looking at the time you are projecting your resale, and want to make some selling price improvements before going on the market.
Assuming that you have done the research, gotten some good guidance and are ready to make improvements for the reasons mentioned above, there are other important considerations. Advisors may have given you some guidelines concerning just how much more your asking price can be increased and still be on target for a successful sale. The improvements you have in mind should fall within those cost increase guidelines. Before you decide to cancel one aspect or another from your plan (because it would put you above a reasonable dollar amount) investigate the many options concerning materials, alternative solutions and revisions. Again, consulting with the industry pros is a wise investment.
Then, take a look at keeping your risks to a minimum. Uncle Harry might be a great guy who has been puttering as a handyman for years. But when you are trying to enhance your value to get the best return on your investment dollar, professionals are a better choice. Yes, it won’t be as cheap as Uncle Harry, but it could make the bottom line difference to a prospective buyer’s critical eye).
Making sensible — and successful — decisions on a home bought partly with the intention to improve and sell will help and enhance your financial profile when you apply for subsequent mortgage loans.
Readers: I cordially invite your questions. If we do not have the answer, we will refer you to an appropriate resource that does.
Jacie Casteel is a Senior Loan Officer and Branch Manager of Sterling Mortgage in Lakeport, CA. She has a 15 year career in the mortgage industry. Sterling Mortgage provides experienced, personal guidance thru the maze of the mortgage world. Questions and topic ideas can be directed to welcomehome@sterlinglakeounty.com. Feel free to contact us at 707-263-51142 or visit our website at SterlingLakeCounty.com. We would love it if you also visited us on Facebook. BRE#01215943/01830856/NMLS#1850/301543/232706
