Real Estate Value

How to Find Bargains, Improve Your Property, and Understand Market Worth

Can you buy homes below market?

While a typical buyer may look at five to ten homes before making an offer, investors searching for bargains often review many more. Finding a true bargain takes patience and determination. Common strategies include:

• Buying a fixer-upper in a transitional neighborhood, improving it, and reselling or keeping it.
• Purchasing a foreclosure property after careful research.
• Buying a house scheduled for demolition and moving it to a new lot.
• Acquiring a partial interest in a property, such as through tenants-in-common partnerships.
• Buying leftover homes in new home developments.

How can I improve the value of my property?

Market conditions largely determine property values and are beyond a homeowner’s control. However, factors such as the condition of your home, certain improvements, and neighborhood stability can positively affect value.

Historical market upswings have occurred during the early 1970s, late 1980s, and late 1990s when the economy was strong and home sales increased.

Certain home improvements provide high returns on investment. According to Remodeling magazine’s annual “Cost vs. Value” report:

• A remodeled bathroom recoups about 81% of its cost.
• A bathroom addition returns about 89%.
• A master bedroom suite adds roughly 82% in value.

Quality workmanship is critical; poorly executed remodeling rarely adds value. Neighborhood safety and community programs, such as organized neighborhood watches, can also enhance property values.

How do you determine the value of a troubled property?

Buyers interested in foreclosure properties should gather as much information as possible from the lender, including expected bid ranges.

If access to the property is restricted, speak with neighbors about its condition. You can also research comparable properties through local county recorder’s or assessor’s offices or specialized online resources.

How do you increase the value of your property?

While market forces dominate, homeowners can improve value through maintenance, remodeling, and community involvement.

Key improvements include remodeling kitchens or bathrooms, finishing basements, and landscaping upgrades. Living in a stable, safe neighborhood where others invest in their homes also helps increase property value.

However, avoid over-improving beyond neighborhood standards, as it may not result in full cost recovery.

What are standard ways to find out how much a home is worth?

A comparative market analysis (CMA) and an appraisal are the two primary methods to determine home value.

• A CMA is an informal estimate by a real estate agent or broker based on recent sales of comparable homes. Research should include current listings and sold properties of similar size, construction, and location.
• An appraisal is a formal evaluation performed by a licensed appraiser, typically costing $200 to $300. Appraisers consider comparable sales, location, square footage, and construction quality.

What is the difference between market value and appraised value?

• Appraised value is the appraiser’s certified opinion of a home’s worth at a specific time, often used by lenders during loan approvals.
• Market value is the price a home will likely sell for, determined by current market conditions. A CMA provides an informal estimate of market value.

What kind of return is there on remodeling jobs?

The Remodeling magazine’s annual “Cost vs. Value” report tracks returns on remodeling investments. Remodeling improves livability and curb appeal, which can increase resale value.

Recent trends show the highest returns come from kitchen and bathroom updates, home-office additions, and amenities in older homes. For example, adding a home office can recoup about 58% of the investment.