Hypothetically speaking, if there are two split-level homes for sale across the street from each other, same size yards, garages, landscaping etc, basically same exact style/layout, decorated the same, identical in every way except one is a 3bed 1.5bath listed for $140,000 and the other is a 4bed 1.5bath, how much more do you add to the price for the 4th bedroom?
Remember everything is identical in this hypothetical scenario. I just want to know how much an additional bedroom is worth.
May 10, 2012, 10:04 PM
Have a few questions before I can venture an opinion on your inquiry. Is the square footage the same? If so, what is the area which comprises the 4th bedroom in the one house being used for in the 3B house? If not, what is the difference in square footage?
An additional bedroom will "usually" add value but not necessarily if it is at the expense of making all the other bedrooms substantially smaller. Just need to add this additional information - understand that you have said this is "hypothetical."
May 10, 2012, 10:13 PM
My take? If the homes square footage is the same and everything else comparable, all four bedrooms might be small compared to 3 where the master was larger. I believe the 3 bedroom w/master might be worth more (and more desirable) than if all 4 were small.
May 10, 2012, 10:39 PM
Let's say the 3bed 1.5bath has 1450sqft. and the 4bed 1.5bath has 1670sqft. (220sqft for the 4th bedroom)
Except for the extra 4th bedroom in the one house, the rooms in one house compare equally to rooms in the other house.
I was just wondering if the 3bed was priced at $140,000 would the 4bed be priced at $145,000 or $150,000 or would an extra bedroom not affect the price at all?
How much is an extra bedroom worth, if anything.
Also, are 4bed homes a little more desirable than 3bed?
There is no answer here as for buyer attraction. While some buyers want a fourth bedroom, they might get by with 3 if they think the kitchen is a lot nicer..for instance. Also the square footage may be the same and the buyer prefers the bigger rooms in the 3 BR.
As for value --if the HEATED square footage is the same there would be no extra value for the "fourth bedroom". Appraisals are based on HEATED square footage, under roof square (including patios, utility and garages that are attached), improvements/upgrades, land and land improvements like inground pool, and all maintenance/condition.This message has been edited. Last edited by: real estate lady,
May 10, 2012, 11:26 PM
Originally posted by sunnysunflowers: Let's say the 3bed 1.5bath has 1450sqft. and the 4bed 1.5bath has 1670sqft. (220sqft for the 4th bedroom)
Well, that would be QUITE the 4th bedroom - about 14x16 - far larger than the master bedroom in the 1450 sf 3B would probably be! But, I get the idea!
Myself, I think people like the idea of 4 bedrooms because they are thinking of using the 4th bedroom for a different purpose - crafts, sewing room, reading room, storage room, computer room, home office and the like. Not so much as an actual 4th bedroom although large families would, of course, be more attracted to a house with 4Bs as opposed to 3.
I think it comes down to square footage - a house with 220 more square feet regardless of number of bedrooms - will be worth whatever the market value of square footage is in that particular locale versus the house with lesser square footage.
May 11, 2012, 08:43 AM
Absolutely, as stated above by rel and IR!
May 11, 2012, 09:02 AM
One other point - with only 1.5 baths - I doubt the 4th would add much value if any except for the extra sqare footage. Someone who needs that many bedrooms is going to want at least 2 full baths.
For appraisal purposes the extra sq footage and extra bedroom will add to the appraised value - but for selling purposes no real added value as a 4th bedroom.This message has been edited. Last edited by: Charming,
May 11, 2012, 09:21 AM
Considering that the properties are comparable in all other ways except for square footage:
The $96.55/sf for the 3 bed property initially indicates that another $21,241 could be added to the price of the 4 bed property (a total of $161,241).
However, it probably wouldn't work out that way. As Charming stated, the house still has 1.5 bathrooms. Most buyers of a 4 bed home want at least 2 full baths in proximity to the bedrooms. Also, unless there are other upgrades to the 4 bed house over the 3 bed beyond the add'l 220 sq feet, the add'l $21,000 price would be a hard push.
A seller might get the price of $161,241 if the kitchen was head and shoulders above the 3 bd home or, very likely, if that 4th bedroom came with a full bath.
Realistically, if 3 bd/1.5 bath homes in the neighborhood typically CLOSE for $140,000, the 4 bd/1.5 bath (comparable (in all other ways) may go for $145,000 - $147,500. IMHO
May 11, 2012, 09:56 AM
Personally I think there are just way too many variables on any home comparison to just put a value price on a bedroom. I would say that price per square foot, is maybe a very rough place to start...but that is about all.
Bathrooms definitely are an important value point, as mentioned.
May 14, 2012, 07:13 PM
Originally posted by Charming: One other point - with only 1.5 baths - I doubt the 4th would add much value if any except for the extra sqare footage. Someone who needs that many bedrooms is going to want at least 2 full baths.
For appraisal purposes the extra sq footage and extra bedroom will add to the appraised value - but for selling purposes no real added value as a 4th bedroom.
Yes, I agree with you - and to have 4 bedrooms in that small a space (1600 +/-) the bedrooms would have to be a lot smaller than I'd want. AND, only 1.5 baths? No way would I even consider something like that and I'm a single person!
May 14, 2012, 08:25 PM
Going back to your original example, Sunny, to be very brief/blunt, the extra bedroom is worth what a buyer is willing to pay for it. Without a difference in the overall square footage or any other factors, the difference in value would most likely be slim to none, IMHO.
WRT an appraisal, the number of bedrooms is technically not a determinant factor. Square footage most definitely is. (Incidentally, the number of bathrooms also is -)
When an appraisal occurs, however, the appraiser attempts to find the best comparable sales to complete the Sales Comparison Approach. That said, the appraiser will attempt to find sales w/both similar s.f. and # of bedrooms. For that reason, the bedroom tally (indirectly) may be considered by the appraiser.
IME, IRL, the scenario you originally presented, comparing the 2 homes in the same development with similar locations and only the bedroom tally discrepancy - any difference in value between those two homes would be neglible - say a few thousand dollars, depending on overall values in that particular market.
On second thought, because they're across the street, one or the other might have a superior exposure and be valued at $5K - 10K more, again depending upon the overall values in that particular market and with no other adjustments. That's my best guess. Same exposure would be more comparable, IMHO.
Square Footage typically adds value but at a declining rate. For that reason, I avoid using an average s.f. when comparing and contrasting properties. Given your revised example, with an extra 220 s.f. (IIRC) and again in the same development with a similar location - that would add a small amount of value, IME.
If you compare homes in the same development and/or community or town/city, you'll find (IMHO) that most areas have an optimal sized home. For instance, the optimal, most highly valued size for a downtown condo would be a 2/2, IMHO. Yes, a 3rd bedroom w/add'l s.f. will add value but again, at a declining rate.
Consider a suburban home and the optimal size probably changes to either 3/2 or more recently, 4/2. (BTW, average new home sizes were increasing as mcmansions were built but in the past few years started declining, IIRC.) In Sunny's original example above, if the development's a family area, 4 b.r. homes might be slightly more desirable/marketable. Given the identical s.f., however, I'd still estimate only a slim difference.
IMHO, the optimal sized home in any given area will command the highest price per s.f. on average. Incidentally, I'm holding all of the other variables constant, when considering the properties. So, no difference in kitchens, amenities, other upgrades - no appraisal adjustments for any of those variables.
Great topic, Sunny. JMHO, as usual.
May 14, 2012, 09:06 PM
ITA, that's my experience too, when dealing with similar properties, in the same development, RErocker.
Getting ready to list, sunnysunflowers? If so, good luck!