“Isn’t It Ironic…Don’t You Think?” No, this is not a tribute to Alanis Morissette. I was thinking about the home-selling process. When homeowners prepare to sell or refinance their home they often spend a great deal of time and money on aesthetic improvements to make their home more appealing…and rightly so. The irony is that when they move into the appraisal process those aesthetic improvements often don’t add a great deal to the value of a house in a “good marketable condition.”
No one wants to hear that cost does not always equal value. The cost of renovations and the value that they add to a home can vary greatly. There are certain renovations or upgrades that can add significant value to a home and can help sell a home faster. Anywhere from 40% – 80% may be recouped, depending on the project. In my experience, the renovations or updates that add the most value to a home are new kitchens, renovated or new bathrooms, finished basements and increasing the square footage of a home. Aesthetic changes such as painting walls, changing locksets from chrome to brass, installing crown moldings in the great room, etc., may improve the appearance of a house, but, they rarely add value to a house already in a “good marketable condition” for the appraisal.
As I develop an opinion on the value of a home, it is, in great part, by comparing it to houses that have recently sold in that market. If a homeowner sinks $100,000 into finishing a basement and I am comparing a sale in that market with a finished basement, I can’t always know the quality of the comparable sale’s finished basement. I don’t have the opportunity to inspect the comparable sale’s finished basement. My information is garnered through the local MLS, various publications, and/or conversations with local real estate professionals.
Many times a finished basement is just that, a finished basement, no matter the cost.
An Appraisal Blog for Westchester 
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