A basic residential bathroom make a difference in a home's sale price.
A bathroom remodel is a project many homeowners seek to tackle in hopes of raising the value of their homes. However, the homeowner must first consider whether she is trying to increase the appraised value or the market value prior to embarking on such a home improvement project. Does this Spark an idea?
Appraised Value vs. Market Value
There is a distinct difference between the appraised value and the market value of a home. The appraised value is determined by an unbiased opinion of a professional home appraiser. The home appraiser conducts an inspection of the property and studies the current real estate market conditions in the region. The market value of the home is the amount that a buyer is willing to pay and the seller is willing to accept for the home.
Effects on Appraised Value
A remodeled bathroom may not raise the appraised value of a home. Some factors used in assessing the appraised value of the home include the square footage, the number of rooms and comparable home sales in the geographic area. A bathroom remodel that does not add square footage will probably not raise the appraised value. However, a home that is remodeled and adds a new bathroom may increase the appraised value of a home by adding another room.
Effects on Market Value
The market value of a home is likely to increase when a bathroom is remodeled. Generally, a homeowner can expect to receive a 60 to 80 percent return on investment with a bathroom remodel. For example, if a homeowner spends $5,000 remodeling a bathroom, the project will typically raise the overall market value of the home by $3,000 to $4,000. It is unlikely that a homeowner will recoup all of the money used to remodel the bathroom.
Beware of Remodeling Too Much
Sometimes, a bathroom remodel will not increase the market value of the home. When remodeling, the homeowner must take precautions not to overspend. Homeowners want to make sure the remodel fits in with the characteristics of other homes in the neighborhood. If a remodeled bathroom includes granite counter tops, in a geographic area in which residents cannot typically afford to pay for homes with granite counter tops, the homeowner should not expect a high return on investment.
Tags: value home, appraised value, market value, market value home, bathroom remodel, appraised value home