Renovations and Home Appraisals – How Do They Connect?

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Home styles can come and go and sometimes come back again just like wardrobe fashion. Renovating / remodeling one’s home can improve the value of the house. You can use different styles and layouts for remodeling a 100 year old house and make it look brand new depending on the structure. One can also restore the Custom Home Builders Oakville original design by carefully reproducing the exact qualities and materials used like hard wood, mouldings, glass, and the like. These changes can affect even the hundred year old home’s appraised value.

Appraisals are usually used for a variety of purposes. Every year the county estimates the value of a person’s house to determine the amount of taxes that individual must pay. Renovations affect the value of the appraised amount. The appraisers take into consideration the amount of renovation done as this increases a property’s value. So generally it follows that with the increase in amount is an increase in the house’s value thereby, increasing the property tax.

In real estate, appraisals are very important, it helps buyers, sellers, and lenders correlate their prices and in determining the value of the house. A buyer wants to insure that he is getting his money’s worth. You see despite visible renovations there might be other property discrepancies. A seller also has to have an appraiser, especially for a newly renovated property. When the seller renovates his property’s value changes, so he must be able to determine the value at which he can sell his asset.

Sometimes, renovations can become a bargaining chip when determining a house’s appraised value. The magnitude of a certain renovation can make or break the appraised price. A renovation cannot just be considered as just that; value and quality of the materials used also becomes a considering factor. The amount of renovations done is also very important, as it affects the labor intensive factor of the renovation.

But not all renovation are positive, it can also bring about the probability that the appraised value may go down. There are after all unnecessary renovations as deemed by a certain transacting party. Also, there is the fact that the renovation may have been “at the wrong place”; the “wrong place” in a sense that there were more urgent aspects of the house that needed attention but was not given the needed care. The renovation then becomes useless and does not change the house’s appraised value or bring it down.

A home in repair or undergoing renovations can still be appraised. Banks or independent appraisers, need only be given the renovation plans and shown that the owner is financially capable to undertake such plans then they provide a ball park appraised value. It should however be kept in mind, that a person’s taste differ from one to the other. Renovations done by a certain home owner may not be to the liking of another. And this does affect the appraised value.

One must also take not that an appraised value is just an assumption of the price of the property and not the actual price; it may or may not be close to the selling price. So it must not be taken to heart, but merely used as another piece of information.

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