I appreciated a house the other day that was absolutely trashed. So what does this have to do with the best home improvements? If you owned this house, here’s what to do.
In this case (and in most cases) there was such a major lack of basic maintenance that I would just start there. Let me explain what you were dealing with and I’ll give you the solution that can easily make your home pass FHA or increase your home’s value by $25,000.
Let’s start with the house I’m appraising. The subject was a two-bedroom house with a partially finished basement. The exterior of the house was littered with junk, oil drums, lumber, car parts, and broken glass. The exterior of the house wasn’t too bad because the siding was replaced with vinyl siding. The paint on the doors was peeling. The paint in the garage was peeling. The interior of the house was trashed with old smelly carpet. The owner installed his own version of a power cord sticking out of his outlet with the cord coming out the outside of the wall. There were two faucet leaks, one inside the house where the main water cut was and one outside the house. The water heater was leaking and the water was running through the basement.
I had limited comparable sales due to the number of rooms and square footage in the house. It had three main levels of quality and condition. Several of the homes offered a similar number of bedrooms and bathrooms, but have been completely remodeled and/or updated with high-quality granite countertops, refinished hardwood floors, new siding, new windows, and new roofs with updated and/or renovated kitchens. These houses were selling for around $100,000. Some of the homes have not been fully updated, but have been updated with a newer floor covering, interior paint, and maybe a new roof or new siding, but not fully updated or remodeled. Next you had REO’s or (Real Estate Owned Homes) that were in the process of being remodeled and the home owner ran out of money and ended up putting the house back in the bank or you had houses that were completely trashed. The REO and wrecked homes were selling for $40,000 or $50,000.
In which houses do you think I put more emphasis when I finished the evaluation? You’re right, the REO and vandalized houses. Most of the time, the appraiser will avoid using the REO sales, but if the REO sales are the best sales to compare to the subject, the appraiser can use them.
So my best advice is to make sure your home doesn’t look or smell like an REO sale or, in fact, offer the worst home in your market area. Replacing basic household items and properly maintaining your home is one of the best ways to increase the value of your home. The rule of thumb is if it doesn’t pass the smell test, clean it up or throw it away. Make sure you get the proper permits for all home improvements, and make sure you don’t have any peeling paint. Here are easy steps to some of the best small home improvements. And doing this along with replacing your discarded floor covering, painting the interior and exterior, and a good cleaning will go a long way toward increasing your home’s value.
