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Real Property Appraisals/Best improvements to 2 bed 1 bath appraisal value?


We have a 2 bedroom 1 bath very old farmhouse in rural Missouri that we are refinancing in the next month.  We bought right before the real estate crash, but didn't overpay relative to the market then.  (And rural Missouri didn't suffer like Las Vegas or anything.)
The house is on 7 acres of pasture with a spring-fed pond and very secluded. (1/4 mile off the road, 6 miles outside a town of 10K, 15 miles from a town of 50K)
The appraisal when we bought it just called it "more than 85 years old".  Elderly neighbors tell us it was moved to its current site in the 1950s.  Ceilings are 7 feet 4 inches, and house is a 2/1.  Those seem to be the main value-busters.
We have added a new roof, new vinyl siding, walk-in closets to both bedrooms, and are replacing the kitchen next month with custom cabinets and granite countertops, and have added a new HVAC system (this week) previous heating was technically baseboard, but they didn't work.  We used wood heat. (which lenders won't accept.)  
So I say all of that to ask, basically, have we helped our appraisal value at all?  And are there strategic improvements that would increase our appraisal value for an old 2/1?  
We have an 800 square foot unfinished walkout basement with a bathroom plumbed in, but not installed. We have just under 1000 square feet above grade.
Is completing a bathroom below grade worth the return?  Is there any point in making it a 2/2 on those terms?  We could add a bedroom in the basement as well, but I come back to the same concern.  Is a basement bedroom going to add any value in a 2/1 house?  Or is it being below grade (even on a windowed walkout wall) going to help at all?
We're not looking at selling, but do want to maximize appraisal value for debt consolidation and are willing to invest where it makes sense.  Real estate values are fairly low here in general, but so are improvement costs.  (my kitchen remodel with custom cabinets, island, new flooring, farmhouse sink and granite countertops came in under 10K) Acreage is very desirable in our area too.  
We are very out of our depth here, and don't know anyone to ask this sort of thing.  
Finding comparable sales around us with acreage, 7 foot ceilings, etc. is hard.  Only about 5 houses within a mile of us at all, and none of them have sold in 10 years. (does that make our area "desirable"?)  We were the most recent buyers within 2 miles.  There have been sales within 5 miles in the last year, but with different acreages etc. And don't know how to find their sale prices to get good comparable details, and don't know how similar homes have to be to be "comparable". (they included a newer 4/2 on 3 acres, and a very old 4/1 on 70 acres.) We would be very grateful to have the voice of someone who knows more and can help us understand how all of this stuff works.



I just answered a question from someone named "Denna" - I assume that that is you!

You have already completed several of the remodeling projects that are very important. I would Google: "remodeling that adds value to your home" and read all the posts that respond to that issue. Also Google different variations of that question to get a good idea of what will add value. Also, I would go to the Agent I told you to go to in my answer to your other question and ask them what is adding most value in your area. Real estate is very location specific and what adds value in my area, may not be what adds value in your area. Any Agent in your area will know what buyers are looking for when buying in your area.

I would say that the 2-bedroom 1-bath aspect of your property is the "value buster" as you say. Since you have 7-acres, the most likely buyer, in my mind, if you sold would be a family with children. The lack of bedrooms and baths is a real problem to a buyer like this.

The basement would seem to be the most cost effective place to add a bedroom and bath. However, keep in mind that below grade living area, even those with walk-outs, have to be valued differently. Above grade areas are accounted for on one line of an adjustment grid, basement areas and finish are accounted for on a different line on the adjustment.

Basically, on an adjustment grid in an appraisal, your house would show as 1,000 SF on the gross living area line and be comp'd against other houses of 1,000 SF +/- and the 800 SF basement would be shown on the "basement" line and comp'd against other houses with basements.

Your going to have to decide if adding anything to the basement is going to be cost effective. If the basement is musty & moldy and this can't be fixed, perhaps a buyer with a family would not want to put a child in this basement.

Since you have 7-acres, there doesn't seem to be any problem with adding first floor areas. Could a bedroom and bath or two be added to the 1st floor without creating a functional problem? You do not want to add a bedroom behind an bedroom in which you would have to walk thru an existing bedroom to get to the added bedroom.

With regard to determining the age of your house, if this becomes important, you should go to your local building/planning department. If they don't have any information, you should go to the property assessor in your area. One of these agencies will have some kind of information about your house.

In conjunction with a local real estate agent's opinions, I would talk to a local contractor and get bids for adding a bedroom and bath to the basement and adding at least one bedroom and bath to the 1st floor area. You can then compare the costs and decide what is within your budget.

After the costs for adding bedrooms/baths are estimated, you should then get back to the Agent and find out what 3 or 4 bedroom homes with 2 or 3 baths are selling for. You want to try not to spend more in total construction costs than the price for which you could sell the home.

Good lick to you. If this answer was helpful, please give me a great grade !!

John C. Carlson  

Real Property Appraisals

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John C. Carlson


Any questions regarding commercial and/or residential appraising, appraisals or real estate valuation such as: appraising as a profession, valuation techniques, comparable sales selection & analysis, the new HVCC and how it affects appraisers & Borrowers. Also, questions like: "Why did my appraisal come in low & what can I do about it?" I cannot answer questions about comparable data in areas in which I do not practice. I have expertise in most areas of So. California.


31-years both commercial and residential valuation experience. State of CA Certified General Real Estate Appraiser, licensed to appraise all property types. FHA Approved. Specialized expertise with historic, architectural & luxury residential property valuation. Experienced in industrial building and small commercial property valuation. Experienced Reviewer of appraisal reports and expertise with intensive forensic reviews to uncover fraudulent appraisal reports. Expert Litigation and Expert Witness experience.

Associate Member of the Appraisal Institute. Associate Member of the Certified Fraud Examiners.

Numerous posts to Blogs. Please "Google" "John C. Carlson Real Estate Appraisals" where a list of responses I have made will show up.

Numerous classes by the Appraisal Institute since 1978 in the practice areas in which I specialize

Past/Present Clients
First Republic Bank Wells Fargo Bank California Bank & Trust Preferred Bank Numerous Attorneys.

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