I have a home I spent $80K on upgrades, do I add that to the value of the property?

Question

The Zestimate is $559K in Fremont, 94538, can I sell my property for $640K?

Answer 1

Not neccessarily. It depends on the type of upgrades. You may want to modify the question to be a little more specific. I have found that upgrades that increase the square footage of the home usually add the most value (as long as the home is not 'over improved' for the area).

However, if the upgrades were for maintenance items you will not receive as much increased value. It would be VERY rare to receive a dollar for dollar increase based on the improvements.

Answer 2

No.

The value is what someone will pay for the property.

What you spend on upgrades is what you spend.

The two are not directly connected. I have seen homes where they put in a $30K kitchen and then had to move. The value of house might have changed $10K.

People can and do over-improve property all the time. There is a limit to what a person will pay in a specific area.

Fremont has a range of properties. If there are homes on your street that have sold recently for $640K are they similar in design, condition, layout, yard, etc? Then maybe your home is worth $640K. If one property is upgraded to be the best on the street and the upgrades are more than most people would be interested in then most buyers will not pay extra. They will pick a different house and save the money.

Answer 3

VERY rarely, if never, will you ever get back the full cost of an upgrade or improvement to the home. Say you spend $30,000 to upgrade your kitchen with oak cabinets, new appliances, and Corian countertops. This doesn't mean that the value of your home is now $30,000 higher.

If the money you spent was "permanent" upgrades (things that you normally would not, or can't take with you when you sell the house), the full cost of these upgrades will be applied towards your cost basis in the home, so you recoup the cost when you sell your house, because it would reduce the gain that is subject to tax.

Answer 4

If the Zestimate is for $559, then your house is worth between $450 and $650, so you might be able to sell it for $640.

Answer 5

It's tough to translate improvements right into added price. It depends on how much it made your property like properties that sold for more.
Improvements like bathrooms, kitchens, electrical and plumbing may cost a lot but will not appeal to all buyers.

Answer 6

Basically bathrooms and kitches add value, the rest are considered as personal choices.

Answer 7

You can try. Home prices are currently depreciating though.

Answer 8

Home Improvements That Pay Off:

Though remodeling your home can add some pampering and luxury to your life, most home improvements don't recoup the money spent on them. This article takes a look at some improvements that can significantly increase the value of your house.

There are two main reasons people take on home improvement projects: for their own pleasure and in hopes of increasing the resale value of their homes. As long as you spend time and money for the first reason, you'll be okay. It's when you start thinking more about the second reason that you may be in for a disappointment. Even if improvements add value to your home, few recoup the money they cost. For example, a swimming pool, which costs tens of thousands of dollars to install, adds little to no resale value to a home. People are turned off by the maintenance aspect, and parents with small children will worry about safety issues.

So, what improvements do add enough value that you'll come close to making back what you spend? It's the highly visible improvements that will help most. Unfortunately, the less visible ones don't impress. Replacing the roof or furnace, while they may need doing, won't convince a home buyer to pay more. Likewise, new energy-efficient doors and windows are not likely to recoup the cost of installation (However, if you are going to continue living in your home for the next few years, $1,000 spent on insulation and caulking existing windows and doors can help you save on your energy bills).

The biggest home improvement you can do to impress homebuyers (and make them want to pay more) is one of the cheapest. Paint. As long as you pick colors that will appeal to a wide audience--and you do it right before you list (before it has time to get mucked up)--you'll increase appeal. Likewise crown molding is relatively inexpensive to install but adds the wow factor to otherwise regular rooms.

So, what else is worth doing? You may have heard that kitchens and bathrooms are what sell a house, and this is true, but don't think you have to spend tens of thousands on a whole-room remodel. Getting rid of outdated wallpaper or paint will help tremendously. Also sand and paint/stain old cabinet doors to make them look new. Switch out the dated cabinet hardware for something stylish and modern.

Any time you can take dead space (i.e. an attic or basement) and turn it into functional space (i.e. bedroom, office, media room), you stand a good chance of recouping much of the money you invest in the project (85% of the cost returned at resale is the national average).

If your house only has one bathroom, you can recoup about 90% of the cost by adding a second. (Adding a third gets you back less).

Landscaping can also improve curb appeal and salability of a home, but don't spend thousands on hiring a professional (it won't increase the value anywhere near that much). Tackle landscaping projects you can do yourself instead.

Keep this advice in mind before you open your pocketbook to hire contracts and buy materials for massive remodeling projects. If you're going to spend a lot, make sure it's--first and foremost--for you and your family, with resale of the house a distant second consideration.

Deciding Whether a Home Improvement Makes Financial Sense:

Millions of homeowners have taken advantage of low mortgage and home equity loan interest rates to make home improvements or remodel their homes over the last several years. When they sell their homes, many of them are unable to recoup the money they put into the improvements. Not all home improvements are created equal, so how do you know which ones will pay you back the money you put into them?
Home improvement payback values vary widely by region and even by neighborhood. In general, expect to recoup less of your investment in a slow real estate market than you would in a hotter real estate market where houses are appreciating rapidly in value.

One of the most popular projects, finishing your basement, has one of the lowest rates of return,. The average payback for finishing a basement is less than 50% of your costs, so if you spend $10,000, you can expect to increase the value of your home at resale by less than $5,000; the other $5,000 comes out of your pocket.

Kitchen remodeling and bathroom additions often pay back 75% to 90% or more of your costs. In-ground pools end up being notoriously bad investments, averaging a payback of less than 10%. Whirlpool baths, fireplaces, and decks don't fare much better. Remember that what's important to you may not be important to a potential buyer.

Improvements that potential buyers are most likely to be willing to pay for include:


*Adding or remodeling a bathroom
*Kitchen improvements
*Adding a room
*Landscaping
*Adding a bedroom
*Adding a garage

You can't always make a decision about home improvements based solely on the financial aspects. You may need extra space for an expanding family or have a home improvement that just can't wait, like a new roof. But if you're planning a home improvement project that doesn't have to be made, how do you decide if it makes financial sense?

Remember that when it comes time to sell your home, it's never a good idea to have the biggest or most expensive house in the neighborhood, because it will be more difficult to sell if the asking price is higher than other homes. The same principal applies when remodeling. If you make your home significantly larger or more expensive than others in the neighborhood, your likelihood of recovering your costs declines.

So, think carefully before tapping the equity in your home to make improvements. If you plan to sell in the next five or so years, you may recover only a small percentage of the money you put into your home improvements. You could even end up owing more to the bank than you can get for your house when you sell it.

If you're planning to sell and are considering making improvements in order to increase the selling price, do your homework first. Talk to experienced realtors, builders, and other industry professionals about whether you're likely to make back the money you put into the improvements.

And on another note....Do not use Zestimate or Zillow to appraise your home. It in not accurate and will most likely bite you in the butt after you have listed your home inaccuratly and your home sits on the market.

Talk with a Realtor, have them run a CMA - Competitive Market Analysis on your home. A CMA is a detailed report that determines market value by comparing your property to similar properties in your area which have recently sold, those that are currently on the market, and with those that were marketed but did not sell.