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    Prudent or over improvement?

    Would you believe improving one’s home is a common instinct in people and some animals? You can see this in how children enjoy making things out of their toys, blocks, boxes and tape etc. Even with no instruction I have watched a child take almost anything and try to build a home for a cat, dog, or themselves. “Habitat improvements made from impulses of artisanship and craftsmanship”.

    But what happens when it all goes too far and what does over improving a home mean? “Lets max out the budget, and pull out all the stops!” Hold on there pardner…

    To over improve a home means to put more money into a home than you can get out in a selling situation, For instance, a home may never be worth more than a certain amount of money – no matter how many premium finishes, appliances, landscaping, and upgrades are added to the home. The reason? The location of your home, square footage and nearby comparable sales all dictate how much a home is worth..

    Over Improved for the location — A story I read on the internet tells of a homeowner who owned a $400,000 house in a $400,000 neighborhood. The owner “did a ton of renovations and additions” — and then listed it for $700,000. “It’s a nice house, but the strategy was unrealistic. It’s over improved for the location.” People are less willing to buy a $700,000 house in a neighborhood where homes don’t usually sell for more than $400,000. Another good saying is, “don’t create a million dollar kitchen in a $300,000 home.”
    Depending on the real estate market, your neighborhood, and what buyers are looking for you may need to do less – or more – than you think

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    Another realm of over improvement is additions, typically very costly but one must ask is it consistent with the scale of the other houses? Building a 5 car garage attached to your home when other homes on your street only have 2 will make the house look smaller than it really is. This is an unintended and undesirable side effect.
    Building a second floor over a section of your house is almost always a bad idea as well. Due to the fact the original architect designed the home to flow together in a certain way which gets disrupted by additions.

    So you have this awesome idea to put a couple 6’ concrete statues of lions by your mailbox. Then there is your 12’ high water fountain in the front yard and second floor porch that was added onto the front of your house. Beautiful improvements, if the home was bigger than 1100 sq ft. Remember scale! The idea here is to not put time and money into something to find out it HURT the value of your home. A good rule of thumb: Don’t raise your home’s value any higher than 10 percent of the average cost of homes in your neighborhood.

     

    Written by Brian Arcudi of Glenn Jones Group with Coldwell Banker Access Realty

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