Purchasing and/or building a new home can be a bit overwhelming, especially when you are given many different options and selections to choose from. There are multiple considerations when choosing these options, but most importantly, take into account items that will add value to your newly built home. What you feel is desirable or worth spending additional money on, in upgrades and options, may not necessarily add value to your home in the long run. So, let’s take a look at some underlying factors, to help guide you when making your choices.
Most buyers have an idea of what they love and want in a home. However, do they know if that upgraded counter top or finished attic will add value? Here are some of the items to consider when trying to add value:
- Structural Improvements
- Energy Efficient Windows, Appliances, & HVAC Systems
- Room Additions & Extra Storage
- Counter Tops & Flooring
- Curb Appeal (ex. stone accents)
Although there are many items to consider, a buyer should also keep in mind appraisal value of the home and the other comps in the neighborhood. This leads us into looking at this criteria from an appraiser’s prospective.
When looking at value in a home from an appraiser’s standpoint, items that a buyer may see as valuable, the appraiser may not. During a visual inspection the appraiser may notice countertops were changed to granite, ceramic tile flooring was added, or a full bath addition. They typically will not notice upgrades such as changing type of carpet or padding. Buyers should also be more aware of the other homes in the neighborhood. When speaking with Dave Kozzarelli from Apex Appraisals, he states, “We typically go by apparent changes to account for adding value. Buyers should ask questions about the other homes features in the neighborhood when deciding on options. They never want to be the best home in the neighborhood, or the only home with a finished attic.” (Dave Kozzarelli, personal communication, January 21, 2014) Another factor to consider is possibly making structural changes at the time of build, instead of doing them down the road on your own. In the end, this could save you money and labor. Kozzarelli also suggests that when trying to add value, one should try to stay within 5-10% of the home value of the neighborhood.
Among all the decisions and excitement of choosing options for your new home, the last thing buyers tend to think about is resale value. Buyers should try to keep in mind that choices made in the builder’s design center can have an effect on the future property value, as well as current property value.
Lerner, M. (2012, May 17). Cover story: Home options that add the most value. http://www.washingtontimes.com/news/