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things not to do to a house

Things that don’t add much value to your home

September 27, 2017 By Ryan Lundquist 25 Comments

We’re always talking about what adds the most value to homes, but what about things that DON’T add much value? In other words, what can you do to your home that will help you get you very little return? I asked colleagues in the 100% Appraisers Group on Facebook to pitch in some thoughts about items that don’t tend to add value, and here’s what they said. Anything to add to the list? I’d love to hear your take in the comments.

First, some general principles:

1) Just because it was expensive doesn’t mean it’s valuable.

2) Buyers don’t often pay the cost of what the owner spent (except on HGTV).

3) Some features are more valuable depending on the price range and location. There isn’t one list of upgrades that can apply everywhere equally.

4) Appraisers don’t actually give value. Instead they recognize it in the market.

5) Buyers tend to focus on the total package of a house, which means they aren’t looking to pay for each specific upgrade.

PLEASE READ: Just because something is on the list below doesn’t mean it adds nothing. The issue is the contributory value is often much less than the cost of the item. So from a cost perspective we can generally say owners are probably not getting the most bang for the buck with many of these features. The problem though with any value list is that in some situations and markets any of these items could be a big deal for value (like parking spaces in a big city or a pool in the luxury market). So just read this generally as it is intended, check out the comments, and pitch in your thoughts. Please also see principles 1-5 above. This paragraph was added later on 09/27/17 to help clarify.

Improvements that don’t get much value from appraisers:

  1. Water softener.
  2. Walk-in bath tubs (like this one).
  3. Whole house vacuum system.
  4. Built-in pool (buyers rarely pay the same as the cost).
  5. Over-the-top expensive landscaping.
  6. Expensive repairs for something that is working fine in other homes.
  7. Highly-upgraded granite vs standard granite.
  8. Really thick granite compared to standard granite.
  9. Fruit trees.
  10. Expensive blinds or window coverings.
  11. Chicken coops.
  12. Extra outlets.
  13. Radiant barrier.
  14. Reverse osmosis system.
  15. Whole house humidifier. 
  16. Ceramic vs porcelain tile.
  17. Solar panels (nobody pays the full cost of a system in one instance).
  18. Leased solar panels (they’re considered personal property).
  19. Upgrades that were in style in 2002 (might not be in style now).
  20. A previously remodeled kitchen a couple of decades ago.
  21. Specialized heat and air systems.
  22. Foundation repairs (buyers expect a solid foundation already).
  23. Having too many garages for the market.
  24. Above ground hot tubs (considered personal property).
  25. Above ground pools (considered personal property).
  26. Anything that is too personalized.
  27. 4-Car vs 3-Car garage.
  28. Tandem garage.
  29. Cabinets in the garage.
  30. Epoxy flooring in the garage.
  31. Phone jacks in every room.
  32. Guesthouse (adds value, but probably costs way more).
  33. Christmas lighting package from the builder.
  34. Lot elevation premium from the builder.
  35. 6 ceiling fans vs 5 ceiling fans (so minor).
  36. 4-inch vs 5-inch baseboards (so minor).
  37. Over-the-top outdoor kitchens.
  38. Blue bathroom paint (ask Zillow about that one).
  39. Oversized parking pad.
  40. Really expensive outbuildings or custom shops.
  41. Brand new fencing (buyers won’t likely pay the full cost).
  42. Retaining wall.
  43. Designer paint.
  44. What else?

Key questions for home owners when upgrading a home:

1) Do other homes have this feature?

2) Are other homes commanding higher prices because of the feature? If so, how much higher?

3) What are investors doing in their flips to get the most bang for their buck?

Thank you again to the group of appraisers who pitched in some thoughts. Appraisers, if I used something you said, please comment below, introduce yourself, share some thoughts, and let us know what you said.

I hope this was helpful or interesting.

Questions: What else would you add to the list? Does anything on the list surprise you?

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Filed Under: Appraisal Stuff, Resources Tagged With: 100% Appraisers Group on Facebook, appraiser functional obsolescence, appraiser survey, contributory value, Functional Obsolescence, less value for upgrades, list of improvements, Overimprovement, superadequacy, things not to do to a house, upgrades

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