I was wondering how to get my property price to go up. I am asking this because I bought a 75 year old house in bad condition. All the bathrooms were the same from the day it was made, with black and white, ill shaped, broken, ugly tiles ect… It now boast a jacuzzi with seperate bath and shower. Nice new kitchen with new appliances. I took the basement from a wide open space to finished and rentable. I don’t want to go into everything I did suffice to say I took it out of the 19th century to the 20th and it looks lovely.
With all that fix up, I felt that I have added about 100 thousand to the house.
Called my broker he told me he cannot come up with more than half of my calculations. I know they calculate the value of a house by doing the average for the last 3 houses sold in the immidiate area.
Could someone tell me what I can do to get the value of my house to show more than it is? What other factors go into making the value of a house higher.
Thanks inadvance and I love this forum…Come here and read every day even if I don’t always post.
Welcome to reiclub.com. The main question I have for you is are you reselling this property? Or are you asking in general for refinance reasons? This could go either way. The main thing to keep in mind is you can overbuild/over improve for the area. I know that as I did the same with my house. The other deciding factors I would have for you are how much did you put into the house as well as purchase price. Keep in mind two powerful word potentially and reality.
Potentially- You did 100k of improvements
The Reality is the house no matter how beautiful it is will only sell for what the market will allow!
I sold my previous house, finally got rid of the kids and used the equity to buy the current house. I bought it for 325. I intended to live in it all by myself and be happy but two factors are causing me to want to sell, which I will relate below.
If the house was in better condition, in today’s market, the seller a could have easily asked 425 at the time and got it. I know this because I spent the better part of 2004 avidly looking for a house. I looked at about 55 diffferent houses, so I know the prices in our area and they are really high.
I loved the high ceiling, large living room, and just the over all large space within the house. I also looked at the rental income that would come from the basement after fixing it up. Plus all the other fixing up that I did, which I know would help to increase the value.
I bought it with a conventional fixed loan of 10% down with another 10% line of equity so I wouldn’t have to pay PMI. What was not let known to me is the fact that the Equity loan is not fixed and it keeps going up each month so that is one of the factors why I am thinking of selling. The other MAIN factor is that one of my next door neighbors is nobody to live beside. Just the worst.
I am really uncomfortable and I shouldn’t be after spending so much money. Had I known that I would have encountered the problem with the neighbors , I would not have taken a conventional loan but an interest only or an adjustable rate. I would then sell it and hopefully make a profit.
Is there a place on the web I can go to look at the price of the last three houses in my area for free?
I understand that you can only sell for what the market will allow but what are tha contributing factors that allow prices in an area to increase? What is “The Market”?
Say house number one sold for 325, number two for 350 and another for 300, the average would be 325. If the prices are always gauged that way for everyone in an area, how will the prices ever increase?.
I hate to give this advice, but call Realtors and have them give you a “complimentary market analysis”. This will give you an idea of what you house would sell for on the local market.
Another option:
Did you improve the building envelope? Update mechanicals with new energy efficient models? If so your home could qualifity as “energy efficient”. It would cost you about $150 to have a Home Energy Rater come out and inspect the property. If your home is energy efficient you can qualify more potential buyers. DTI ratios go from 28/36 to 30/38… This allows people who could not normally afford you home to qualify for the purchase.
I know this might seem like a stupid comment but if you aren’t in a major rush to sell it (Since you first bought it to live in) put it on the market for what YOU think it is worth. If it was a true flip then what the broker told you might be the deciding factor to sell quickly but if you have the luxury of waiting it out a little and a buyer might go for, or close to, what you are asking for it.
You said you researched around the area and
I know this because I spent the better part of 2004 avidly looking for a house. I looked at about 55 diffferent houses, so I know the prices in our area and they are really high.
Don’t let a nasty neighbor pressure you into moving quicker on a sale. Brokers are knowledgable and have the comparision so it might be he/she is right but their numbers aren’t law, it all depends on how fats you HAVE to sell, not how fast you may WANT to sell.
One thing you could do is go to a website like realtor.com and look at what other comprable homes are going for in your neighborhood. That would give you a better idea of how “The Market” is doing.
If you were just worried about the line of credit and increasing interest rate, then a simple refinance would do the trick.
Like Robb said, it sounds like you may have overimproved on this particular house.
Thanks for all your responses. I really am in no rush to sell. I have thought of refi but I really do not want to pay all that closing fee that I really do not have right now…I will wait until next year before making any decision. Just thought Id ask to see what other people think.
