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posted
I have been watching several shows including Love It or List It and it seems they always increase the value of their house when they do renovations, no matter how small. I have always heard that it is hard to get renovation money back when you sell a house. So why does the value of their houses keep going up usually twice as much as the renovation cost?

Thanks!
 
Posts: 3 | Registered: Sep 03, 2012Reply With QuoteReport This Post
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Hi Jalynnrm, welcome aboard!

My initial thought was to respond that it's because reality television is about the farthest thing from actual reality on the planet, IMHO.

OTOH, another, better answer might be that those are realtor estimates or projections only. They don't represent either appraisals or (even better) actual sales data.

If you review the relevant, current stats from U.S. closed sale data, you'll confirm it's extremely difficult and rare to receive any return on improvement **$ upon resale.

JMHO.
 
Posts: 415 | Registered: Aug 29, 2011Reply With QuoteReport This Post
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funny but that show seems to come from Canada and guess housing up there is more .But if you look most house's there are so tight together it amazes me .The only thing that will help a sale in the US is if you are in a high demand area .Updating paint colors in the house and just clean and declutter to make house look bigger .Remember cluttered kitchen cabinets and cluttered closets say a lot about space . fresh clean smell .Not fake candle smell or fake spray scent smell .Seems people notice the fake smells these days .
 
Posts: 531 | Registered: Jul 28, 2010Reply With QuoteReport This Post
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It is important that you separate what really happens in the US with what the TV programming says that it happens.
I cannot speak for the real estate in Canada, but in the US. unfortunately speaking we are in a very big slump regarding the housing market, and upgrades may make your home sell faster but the price is very much tied into what your area is selling for.
So far we are not improving much since 2004-06 in prices. hopefully we will in a few years. in the meantime, you don't sell unless you really have to.
 
Posts: 4914 | Location: 0 | Registered: May 31, 2007Reply With QuoteReport This Post
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Jal, Welcome to the Real Estate Boards! Smile

A month or two ago I would probably have suggested that you would get more responses on the TV Shows Board but, since I have started watching "Love It, List It" recently, I do think your post belongs here.

The so-called increase in value is a figment of someone's imagination but it makes for a good TV show. Bottom line, the only way to increase value is through square footage and/or major renovations; cosmetic changes DO NOT increase value although they may help it sell faster than places that have not been up-dated. Cool
 
Posts: 6487 | Registered: Jan 01, 2008Reply With QuoteReport This Post
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Jalynnrm,

Just to clarify - I was speaking of receiving a return on your improvement **$, not merely recouping the cost of the improvement itself. (You mentioned that those reality RE programs often claim that the homeowners doubled their money.)

Again speaking of U.S. closed sale data only, IIRC, even in the go-go days before the recent RE crash, renovators often stated that homeowners would receive an 80% "return" on a kitchen. So, in other words, a kitchen update would actually cost a homeowner 20%. Like the realtor's estimated, informal value as presented on the program you mentioned, those were sales projections, too - and may have been overly optimistic.

Yes, major improvements may increase the value of your home. By how much? Depends on many factors but it's highly unlikely that you'll recoup even 100% of your costs in both good markets and bad.

My links don't work but if you're interested, let me know and I'll provide a web address for the annual study (U.S. only) that breaks closed sale data down by area of the country, specific improvements and the % of cost recovery upon sale.

Hope that helps and makes sense -

All of the above, JMHO.

This message has been edited. Last edited by: SurfNow,
 
Posts: 415 | Registered: Aug 29, 2011Reply With QuoteReport This Post
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The only way you may be able to get the money back on an improvement is to sell it right then ,just like anything most improvements loose value because they end up looking out dated over time or they are not the taste of the new potential buyer .I have seen that on house hunters ,lady says I don't like the color of the granite or the color of the kitchen cabinets or the floor covering ,realtor says it was just redone with in the last year ,well it is not my taste the lady says .No one has the same taste and what i like is not what others like .I look at square footage these days and what comparables go for in that neighbor hood .I don't think any one these days are ever going to get 100% back unless the home is in a hot market state that offers jobs .I can't understand those shows with realtors and designers that compare houses and all it finally comes down to is location not all the big money the people spent or the all the updates .Location and taste and square feet plus other homes on the market .
 
Posts: 531 | Registered: Jul 28, 2010Reply With QuoteReport This Post
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Agree, sissy. That was actually one of the many factors I was thinking of (but didn't want to take the time to post about) when I mentioned it depends on many factors, above.

Many homeowners neglect to consider their upgrades' depreciation. An improvement completed 15 years prior to a sale isn't going to yield much cost recovery, if any, even before considering that it's probably very dated. The seller already exhausted its useful life.

You're also correct about taste. Just because a seller throws in the obligatory slab of granite doesn't mean they'll automatically receive that salesperson's 80% cost recovery, especially if they selected an unusual pattern in an unpopular or non-neutral color. Even if they unload the place immediately -

It usually comes down to 2 factors - location and s.f., period. Yes, a home may sell faster with nice, tasteful upgrades but it'll sell at the same price per s.f. as other comparably sized and located properties.

JMHO.
 
Posts: 415 | Registered: Aug 29, 2011Reply With QuoteReport This Post
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Five years ago, when we bought this house we went to major renovations, kitchen, floors, bathrooms, additions you name it we have done it.
Well, the cosmetic renovations are now 5 years old. ie: appliances. therefore, they have depreciated. the rest of the renovations which includes the roof, re wiring gutters, painting, again they are all 5 years olders. Therefore, the depreciation is there.
The only thing that we have gained is the addition of square footage. Of course I am paying more taxes. and if I were to sell, my house would have to be compared to the ones with similar square footage, except for the rest, good luck is for my enjoymet only.
 
Posts: 4914 | Location: 0 | Registered: May 31, 2007Reply With QuoteReport This Post
Picture of DebiinFL
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quote:
It usually comes down to 2 factors - location and s.f., period. Yes, a home may sell faster with nice, tasteful upgrades but it'll sell at the same price per s.f. as other comparably sized and located properties.


You are SO right.... Smile
 
Posts: 144 | Registered: May 08, 2012Reply With QuoteReport This Post
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It amazes me that people refuses to understand that only addition of square footage is what is going to increase your property value.
 
Posts: 4914 | Location: 0 | Registered: May 31, 2007Reply With QuoteReport This Post
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One reason for increased value of properties renovate on Love it or list it, could be because when they speak of the cost of the renovation they are only speaking of the cost of the materials. Not the labor.

Also the renovations, while not increasing sq footage do make the houses more useable, with maybe updated kitchens or bathrooms or sizes of rooms changed.

Obviously renovating properties does increase the value or we would not have had so many "flipping" type shows. Or so many "flipped" houses in different areas.
 
Posts: 12242 | Registered: Jun 27, 2004Reply With QuoteReport This Post
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quote:
Originally posted by lady of shallot:
One reason for increased value of properties renovate on Love it or list it, could be because when they speak of the cost of the renovation they are only speaking of the cost of the materials. Not the labor.

Also the renovations, while not increasing sq footage do make the houses more useable, with maybe updated kitchens or bathrooms or sizes of rooms changed.

Obviously renovating properties does increase the value or we would not have had so many "flipping" type shows. Or so many "flipped" houses in different areas.
I

Although I recognize that having a renovated kitchen, bath etc, makes any home more attractive, When your are going to sell your home. they are going to be priced according to the square footage and the sold comps will also reflact that.
Cosmetics are great, but square footage is what prices a house.
If not ask any realtor.
 
Posts: 4914 | Location: 0 | Registered: May 31, 2007Reply With QuoteReport This Post
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If you want to increase your home value, you must
upgrade your kitchen appliances.
Modern change in bath room
Mostly use natural materiel
renew your paint
find inspiration...

This message has been edited. Last edited by: schell,
 
Posts: 5 | Registered: Nov 13, 2012Reply With QuoteReport This Post
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If you want to get highest and best price sell in a sellers market. Check with your local lenders or Realtors to find out if this is the case in your market.

I highly recommend doing any maintenance repairs first. Then spruce up with paint. Clean,clean then clean so more. Then take a good hard look,
call a Realtor for an opinion, as to not waste money for upgrades if the market is not responsive.
 
Posts: 9192 | Registered: Aug 14, 2007Reply With QuoteReport This Post
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Real estate lady, you hit the nail on the head.
 
Posts: 3052 | Location: Ohio | Registered: Feb 25, 2006Reply With QuoteReport This Post
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Hello, I have a question. I just bought a home its 1800 sq feet it is 3 bedrooms, 1 full bath, 1/2 bath, family room with fireplace, formal living room with fireplace, formal dining room. The basement is finished 1700 sq feet. 2 1/2 attached garage.

My question is I want to make the full bath larger and I'm going to be making one of the bedrooms smaller to do so (by taking the closet out and opening it up into the bathroom, I want to change the bathtub-shower combo. I will use the space that was the closet to put in a nice soaker tub and make a small stand up shower.

Now for the big question. If I made the formal living room into a bedroom and added a walk in closet, would that depreciate the value of my home? The formal living room has a bay window with black marble and there is a fireplace in there as well that is made with black marble all original from 1961. I am keeping the bay window and fire place. Nothing will be changed other than adding a door and walk in closet.

thanks for any information or any thoughts you have.
 
Posts: 1 | Location: Ross, Ohio | Registered: Aug 06, 2013Reply With QuoteReport This Post
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You really should start a new post. Would you do that please?
 
Posts: 6768 | Location: North MN & Northern AR | Registered: Oct 01, 2002Reply With QuoteReport This Post
Picture of CJO
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quote:
Originally posted by Jalynnrm:
I have been watching several shows including Love It or List It and it seems they always increase the value of their house when they do renovations, no matter how small. I have always heard that it is hard to get renovation money back when you sell a house. So why does the value of their houses keep going up usually twice as much as the renovation cost?

Thanks!


A lady I know updated her house BIG TIME! She added a third bath, high-end carpeting throughout, enclosed a porch making it a 3-season porch. Now that she wants to move, she can't get the money she put into it and refuses to take a 'lessor' offer...she's been 'on the market' well over 2 years.

That's my true-life info...best of luck to you.
 
Posts: 2800 | Registered: Oct 19, 2003Reply With QuoteReport This Post
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I really wish that TV viewers were somewhat more realistic as to what many of these shows really represent.
Love it or List is one of the programs that I laugh just by viewing it.
Understand the real state business and how it works, there are here in this message board may Realtors that will tell you that over spending in renovations just to sell, has never been a good idea. Renovate for yourself, and enjoy it.
 
Posts: 4914 | Location: 0 | Registered: May 31, 2007Reply With QuoteReport This Post
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It's all about comps in the neighborhood. Over-improving can come back to haunt you or on the other hand, bring extra equity.

Realtors, appraisers and banks all struggle with
over-improvement on a regular basis. If the sold comps are not to support - can be a bummer.
 
Posts: 9192 | Registered: Aug 14, 2007Reply With QuoteReport This Post
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quote:
So why does the value of their houses keep going up usually twice as much as the renovation cost?

Because it's TV !! and value depends on today's market by region and neighborhood.

This message has been edited. Last edited by: tessa89,
 
Posts: 5029 | Location: NE of S.F. | Registered: Apr 13, 2006Reply With QuoteReport This Post
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Thank you, Realtors in the Message Board, hoping that many unsuspect would be sellers, realize that over improving is a waste of money.
 
Posts: 4914 | Location: 0 | Registered: May 31, 2007Reply With QuoteReport This Post
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This message has been edited. Last edited by: vivek,
 
Posts: 3 | Registered: Oct 21, 2013Reply With QuoteReport This Post
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No solicitation, Vivek! Reported!
 
Posts: 8188 | Registered: Sep 18, 2002Reply With QuoteReport This Post
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