Appraisal experience

[MrSurly]

I’m about to have my home appraised because I’m going to refi.
Of course, I’ve built a detached pole barn (30x40) recently and I’m wondering what you guys have seen as far as the impact on your real property appraisals. I spent about 35k building my shop, but what percentage of that investment am I likely to see on my home value?
I’m not talking about ‘taxable value’ (the county has already readjusted a good bit on that) I’m referring to resale/ financing appraisal .



Sent from my iPhone using Tapatalk

 

[yeldogt]

It will depend on what other houses have -- how your house matches the area.

 

[unslow1]

I have had varying experiences. One time the guy never even came in the house. Another time the guy was checking to see what material the tiles in the bathroom were.

 

[JoeMcGov]

Residential home appraisals are based on "comps:" what other similar houses in the area have recently sold for.

 

[wake74]

Real estate is 100% local, a house may sell for $2,000 / SF or $50 / SF depending upon the market, so unless someone here has specific experience in your local market, it will not be useful advice. A good local Real Estate agent should be able to tell you, what, if any, additional value your shop has in your market. I'd start with a call to a knowledgeable local agent.

 

[ddawg16]

Residential home appraisals are based on "comps:" what other similar houses in the area have recently sold for.

^^ This ^^

There are a few things that will add to the value. But as noted above, a good appraiser is also going to take into account what improvements have been made to the 'comps' houses.

Take for example, my house. I'm the 5th 2-story house on the block. I have the only 2-story garage. But, my house did not appraise as much as two of the larger 2-story houses. The garage made no difference. Now, had it not been there, it would have been a deduction.

All you really care about is the appraisal being enough for a good rate. That is all that really matters.

When you go to sell, that shop is only worth something to the guy that wants it.

 

[turbowoodworker]

Ya, comps define the appraisal, unless your place is a total pile then they will drop a bit.

In a refi, the only thing that matters is the appraised value has to support the amount of the loan. Back in 2006, values were so inflated people refied to take money out and banks and owners got burned. So no more of that. Much more strict.

One other thing, If the appraisal is favorable and you can do it, make sure you get your equity above 20% and you can lose the PMI monthly payment.

 

[MrSurly]

I’m aware of the comps process, and the fact that the sq ft of “living area” is the number being factored with the comp rate.
What I’m wondering about is whether they’ll typically add a value for a detached building as a ‘workshop’ or a garage and if they assign one blanket number for every garage... or if they have a factor for 1-car, 3-car etc. my shop would be equally positioned to be a large shop OR a 4-car garage. It actually has two driveways and four bays with doors to drive four in at once. Will its being insulated and climate controlled count for anything to an appraiser? Clearly it wouldn’t be living area.


Sent from my iPhone using Tapatalk

 

[StreetGLi]

One thing is for sure... You won't get nearly as much value as you put into it, not even close.

Sent from my LG-H873 using Tapatalk

 

[Cobra5150]

It wouldn't surprise me if the amount added to your appraisal is less than 50% of the construction costs.

 

[mike93lx]

Roughly zero
Accessory buildings don't typically add value. I would not expect much if anything

 

[Joe69]

One thing is for sure... You won't get nearly as much value as you put into it, not even close.

Sent from my LG-H873 using Tapatalk

^^^This^^^

 

[ddawg16]

One thing is for sure... You won't get nearly as much value as you put into it, not even close.

Sent from my LG-H873 using Tapatalk

It wouldn't surprise me if the amount added to your appraisal is less than 50% of the construction costs.

Roughly zero
Accessory buildings don't typically add value. I would not expect much if anything

And in case you are wondering......no......no additional value.

The only time that out building is really worth something is when you go to sell.....find the right buyer, it's worth a lot. But to a buyer who doesn't want it....that building is worthless.

 

[ddawg16]

I’m aware of the comps process, and the fact that the sq ft of “living area” is the number being factored with the comp rate.
What I’m wondering about is whether they’ll typically add a value for a detached building as a ‘workshop’ or a garage and if they assign one blanket number for every garage... or if they have a factor for 1-car, 3-car etc. my shop would be equally positioned to be a large shop OR a 4-car garage. It actually has two driveways and four bays with doors to drive four in at once. Will its being insulated and climate controlled count for anything to an appraiser? Clearly it wouldn’t be living area.


Sent from my iPhone using Tapatalk

BTW....we feel your pain. I have a 2-story garage with more sq footage than 75% of the houses in my area. It added NOTHING to the value of my house as far as the appraisal in concerned.

But for the right buyer.....it means I get above asking price.

 

[frank001]

Before I sold my last house, I got an appraisal from a certified appraiser, as well as from a local real estate agent. They both came in low and I told them so. House was one of the nicest in the area.

I sold the house a few weeks later after being listed for only one day for 15% more than the highest appraisal. I listed it for what I thought it would go for. 15% in the S. California market is a lot of $$$.

 

[yeldogt]

I’m aware of the comps process, and the fact that the sq ft of “living area” is the number being factored with the comp rate.
What I’m wondering about is whether they’ll typically add a value for a detached building as a ‘workshop’ or a garage and if they assign one blanket number for every garage... or if they have a factor for 1-car, 3-car etc. my shop would be equally positioned to be a large shop OR a 4-car garage. It actually has two driveways and four bays with doors to drive four in at once. Will its being insulated and climate controlled count for anything to an appraiser? Clearly it wouldn’t be living area.


Sent from my iPhone using Tapatalk

As I said in my post -- location and what's in the area.

If every house has a detached garage --- and it's typical for buyers to want a detach garage. You will get some uptick.

There are many areas where adding a garage will reduce value if it destroys the backyard.

There is no "rule" -- in general ... they don't add anything.

I own a property with a 1700 sf outbuilding/ barn .... When I was looking to buy the other prospective buyer was getting prices for taking it down. The house and outbuilding take up much of the lot .. it added nothing to the price.

 

[ford33]

The accessory building will likely add no value to the appraisal. If you can talk to the appraiser and explain why it would add value to the property then do so. Many refi appraisals are drive-by with little time spent by the appraiser.

 

[03ranger]

The bank is requiring the appraisal, but remember that you’re paying for the appraisal.

When you get of copy of the appraisal; make sure that the appraisal is complete and accurate: square footage, number of bedrooms, and number of bathrooms… If not, call the loan officer and follow-up in writing and have the corrections made prior to signing any more paper work.

We ran into an issue with the bank appraisal being incorrect, the appraiser left off one bedroom and one full bath. You want the appraisal to be as accurate as possible to receive maximum value.

Once the bank realized that we were not going to proceed unless the appraisal was correct, they were willing to pay for another appraiser since we refused to allow the first appraiser back on the property.

 

[Augus7us]

I just looked mine up because of your thread. Lookup your neighbors house with a detached garage on zillow then click the county auditor link, it should pull up the house on the auditors site, if not you can search it manually.

There you will find how much your neighbors house and building is worth. On mine it has an appraised and assessed value. My 30x40 was appraised at around 15k and assessed at 5k. So no, as others have said it rarely adds to the value, in my experience any ways.

The only exception I see is if you are in a prime neighborhood and very few if any have a detached shop. Then you might get someone with money whos wife has to live in that area and they may pay top dollar for it. If you're out in the sticks, then every other house probably has a barn or building and you're never going to see that money come back. That's how it is in my area. I was shocked at how little a building added, despite how much they cost.

 

[unslow1]

As I said in my post -- location and what's in the area.

If every house has a detached garage --- and it's typical for buyers to want a detach garage. You will get some uptick.

There are many areas where adding a garage will reduce value if it destroys the backyard.

There is no "rule" -- in general ... they don't add anything.

I own a property with a 1700 sf outbuilding/ barn .... When I was looking to buy the other prospective buyer was getting prices for taking it down. The house and outbuilding take up much of the lot .. it added nothing to the price.

We are dealing with that right now. There is a 24x48 garage in my Grandparents backyard. The time to sell is coming quickly. The people I know in real estate in this area are telling me to expect a really tough sell unless we can find the right person who wants a garage and no backyard. My sister ended up filling in a big pool in her backyard because it wouldn't sell. Once filled in it sold quickly.

 

[MrSurly]

You all are painting a bleak picture for sure.
A follow-on question that I must ask: (this would not describe mine) if a fellow built a first class “man cave”, furnished, TVs an bar etc, you know what I mean. Would THAT be counted as “living space” (a den)?


Sent from my iPhone using Tapatalk

 

[Higgins]

sold a home in N IL last yr. a home with a 2nd 900 Sq. Ft garage, with radiant heating, 125 Amp panel, gas wall heater, finished 2nd floor. and finished 1st floor, with AC. in a community with 1.5 - 5 AC lots.

Every realtor felt it was a Durant to selling the house, and the appraiser didn't add anything for the outbuilding. Really bummed out !!

 

[James-W]

Around here having a garage is big plus. In the Winter we get a lot of snow and people like to park their vehicles inside. Having a heated garage is a bigger plus because the snow will melt off the vehicles which people also like. An attached garage is more desirable than a detached one, but either type is a plus when it comes to selling a home. Also, having a large garage is preferable to having a small garage but ANY garage is better than no garage.

 

[Briguy_123]

We own a large side by side duplex on a 1.5 acre lot with a 24x24 detatched garage. I added a new 34x48x13, attic truss, radiant heat, ac, led lighting, sprayfoam, drywall, 60x120 road and parking area. Had it appraised before and after. Because it's a duplex (we rent out the other side). The value decreased by 15k due the size of the excessory structure. Filed a grievance on our taxes and had them reduced! If my house was a single family it would have been worth twice as much, and the garage would have added at least another 80k to the tax acessment. We wouldn't have been able to afford the taxes. Real estate pricing must be based on what the average house wife wants. Not the cost of land, building materials, and labor.

 

[My Old Tools]

We sold our house last summer. 4 car attached and 1200SF red iron metal building on slab with driveway. We sat on the market awhile with no reasonable offers. Finally changed realtors and repriced it a bit. 6 weeks later it sold to a guy looking for 4 car garage plus shop. It appraised just fine. Sometimes it's a plus, sometimes it's a minus.

 

[protegeV]

It's a big plus to the right buyer, but a detraction to the masses in general. As others have said it may not make one bit of difference on an appraisal.
Again, it is also location specific. Where I live, an outbuilding is highly desirable, almost expected. So I expect my shop to have a great impact on the future sales proce of the house even though it shouldn't have an effect on tax appraisal.

 

[James-W]

We sold our house last summer. 4 car attached and 1200SF red iron metal building on slab with driveway. We sat on the market awhile with no reasonable offers. Finally changed realtors and repriced it a bit. 6 weeks later it sold to a guy looking for 4 car garage plus shop. It appraised just fine. Sometimes it's a plus, sometimes it's a minus.

I don't really understand why it would be a minus, please explain that. I mean, I can see that someone may not need the red iron metal building and since they have no need for it they certainly won't pay more because it is there. But I can't understand why they would expect to pay less if it is there. I would think there would be a lot of things someone could do with the building. If nothing else, build some dividers inside the building and charge people to store stuff there.

 

[swaterbenny]

For us, every garage door spot you could park a car connected to the driveway was $5,000. Good luck if the appraiser doesn't like your house your paying PMI. Ask me how I know.

Ben

 

[finn]

Some people have no use for a building. In that case it becomes a liability, rather than an asset.

Just something else to maintain, and, to some, an eyesore.

 

[2level]

The county assessor added ~45k after my garage build. It's worth much more to me but I'd rather the assessor value it at zero. I don't use my property for finance purposes or as an ATM, and I would rather pay less property tax.

 

[niget2002]

We're in the market for a house with a shop. From what I'm seeing, the shop is not making a difference in our area to what the houses are going for. SQ footage of the house and lot size is all that seems to matter (and location).

Shops and swimming pools are weird in northern Texas. Some people like them. Some people don't. Neither of them make a difference to the cost of the house. They can be attractors for people that want them, or a detractor for the people that don't.

If we can find a house with both a pool and a shop inside our budget, we'll be in heaven.

 

[yeldogt]

It's a big plus to the right buyer, but a detraction to the masses in general. As others have said it may not make one bit of difference on an appraisal.
Again, it is also location specific. Where I live, an outbuilding is highly desirable, almost expected. So I expect my shop to have a great impact on the future sales proce of the house even though it shouldn't have an effect on tax appraisal.

They are a big plus to some buyers .. just not for any more money. The market determines value .... the guy wanting the space gets it for free.

When I owned a home in Chester County PA -- there was a beautiful property nearby where the owner built a garage for his RV. You have to be familiar with how pretty parts of Chester are .. and this was -- and how an RV garage is out of place. I was told the demo and soil disturbance permit was 40k

 

[slow]

I just looked mine up because of your thread. Lookup your neighbors house with a detached garage on zillow then click the county auditor link, it should pull up the house on the auditors site, if not you can search it manually.

There you will find how much your neighbors house and building is worth. On mine it has an appraised and assessed value. My 30x40 was appraised at around 15k and assessed at 5k. So no, as others have said it rarely adds to the value, in my experience any ways.

The only exception I see is if you are in a prime neighborhood and very few if any have a detached shop. Then you might get someone with money whos wife has to live in that area and they may pay top dollar for it. If you're out in the sticks, then every other house probably has a barn or building and you're never going to see that money come back. That's how it is in my area. I was shocked at how little a building added, despite how much they cost.

Even in this situation, it may not add much to the value. There was a nice 4K sq foot house down the street from me, $900-950K house based on the comps on the same road. It had a 5K square foot shop, with an RV garage, entire place sold for 1 million after being on the market for months. So living space made up 90-95% of the price, and the 5K sqft shop (under Air, concrete block construction to match house very nice building only added a small percentage)

 

[protegeV]

They are a big plus to some buyers .. just not for any more money. The market determines value .... the guy wanting the space gets it for free.

When I owned a home in Chester County PA -- there was a beautiful property nearby where the owner built a garage for his RV. You have to be familiar with how pretty parts of Chester are .. and this was -- and how an RV garage is out of place. I was told the demo and soil disturbance permit was 40k

So thankful I didn't need any permits.

 

[MrSurly]

I was told the demo and soil disturbance permit was 40k

How much of that was permits?


Sent from my iPhone using Tapatalk

 

[protegeV]

How much of that was permits?


Sent from my iPhone using Tapatalk

I think he was saying that a permit for demo and soil disturbance was 40k.

 

[Samh]

Sold my old house this past summer. Realtor added about 20K for the garage. All offers were people interested because of the garage. Around here, it usually works out where it adds about the cost of materials. But like a pool, what it can do is limit buyers.

 

[MrSurly]

Sold my old house this past summer. Realtor added about 20K for the garage. All offers were people interested because of the garage. Around here, it usually works out where it adds about the cost of materials. But like a pool, what it can do is limit buyers.

Oh I’d be happy with the materials cost, as I did all the labor anyway... we’ll see pretty soon


Sent from my iPhone using Tapatalk

 

[ericlar80]

In my area the tax man will assess the value of the shop/garage for the value of construction. If you built it yourself, they add on the cost of labor as if a contractor did the work... No free rides if you do it yourself.

 

[Cobra5150]

I don't really understand why it would be a minus, please explain that. I mean, I can see that someone may not need the red iron metal building and since they have no need for it they certainly won't pay more because it is there. But I can't understand why they would expect to pay less if it is there. I would think there would be a lot of things someone could do with the building. If nothing else, build some dividers inside the building and charge people to store stuff there.

Or they not WANT a red iron building on their property.