One part of our recent refinance that we haven’t yet expanded upon was the home appraisal that was required as a part of the process. It was admittedly a bit exciting and nerve racking at the same time. Exciting because, for the first time since we purchased in 2006, we’d know exactly what all of our improvements were worth to our home’s value. Nerve racking because, well, we all know what the market is doing to home prices these days…
The appraisal process was also interesting because it was a chance for us to reminisce about all of the improvements we did over the last 3 years (the appraiser asked what we updated and couldn’t believe our lengthy list). In being asked to recite all that we did, we came up with this list of everything that’s changed (each bullet is conveniently linked to more info & pics on that subject):
- Several trees removed from front to create grassy yard
- Gravel driveway paved
- Uneven, cracking slate patio replaced with cobblestone pavers
- New energy efficient windows throughout
- New hardwood floors in half of house (replacing linoleum)
- Refinished hardwood floors in other half
- New appliances in renovated laundry area
- Three widened doorways for more flow
- One closed doorway to create 3rd bedroom
- Dining area added to formal living room (pendant light & shelves installed)
- Built-in closets flanking the bed in master bedroom
- Crown molding added to living room and all 3 bedroooms
- Radon mitigation system added
- New light fixtures throughout the interior and exterior
- Fully renovated kitchen with new cabinets, counters and appliances (now there’s a dishwasher!)
We provided a very general estimate of what we estimate we spent (and expected that not all of it would show up in our appraised home value in this sluggish economy) but we were pleasantly surprised when our appraisal came back at that exact amount over the purchase price. Not to mention that the appraiser said it deserved to be even higher, he just couldn’t find comps in the area to justify it on paper. We’re just overjoyed to see our home’s value moving in the upward direction at all, let alone recouping all of our improvement costs thus far in such a bum market.
Have you guys had any interesting home appraisal experiences lately? Or are most of you just shielding yourselves from even having to know at this point? Do tell.
Peter says
congrats… your house is beautiful… It is something that you two can truly be proud of. My wife and I are beginning to go down this road. We are just in the home buying position. Searching for a good skeleton to fix up… You guys got your hands on one, that’s for sure. Nice work.
~Peter
Averill says
Congrats! The house looks great and I’m sure when the real estate market bounces back, the price will go up even more.
Houston housing market is relatively stable right now since we never had a bubble to burst in the first place, but that being said, things are definitely taking longer to sell. We thought about getting the house appraised “just to see”, but haven’t worked up the nerve just yet.
Sarah says
We were very pleased when we got our appraisal back. We bought in August 2008 at what seemed like a good deal. When we had our home appraised in December 2008 it came in $24,000 higher than our purchase price. Holler!
We have not done a thing to the place yet. We are saving up for some big projects like new hardwood and carpet throughout the whole house. We were very happy to have our suspicions that we got a killer deal validated. I really can’t wait to get our new flooring!
Charisa says
We thought having our home appraised was really gratifying too! Takes you down memory lane, doesn’t it? All of the back breaking, mind blowing work over the past two years (well it was fun too!) sorta showed up in the numbers. When we moved in to our little rancher in Colorado it didn’t even have a functioning kitchen… for 4 months! There was a hostage situation in our home in the past (I know CRAZY, no one died.. and surprisingly it’s a nice neighborhood-not the ghetto)so many of the windows were blown out/boarded up, and automatic weapon holes in the tile, drywall and everywhere. Talk about a project!! We spent about $25,000 on improvements so far and the appraisal came back $30,000 higher than the purchase price. Plus we still have to finish the pathetic ripped out basement, and many other things. Not too shabby!
Babs says
Wow, you guys have been busy! Lol, I’m in awe of everything you’ve done to improve your house. I might use this as an example to my guy when I need to convince him that “that next house project” is worth it ;)
Lindsay says
Wow, that’s great! When we appraised last month, our appraisers didn’t care about home improvement projects, and they pretty much only looked at comps. It was quite an ordeal… we had two appraisers and two reviews analyze our house value before they agreed on the value. They are having to be ultra cautious! We didn’t gain in home value, but we didn’t loose any either… right at our purchase price.
elizabeth says
We are looking into refinancing, and our real estate agent thinks our house will appraise for 25-40k more than we paid for it 2.5 years ago…
Beth says
I know you probably don’t mean any offense, and as a loyal reader, I love your blog and your clever titles, but I find this particular one offensive.
As a Christian, I believe that the Lord’s name is sacred and so playing on phrase “Praise the Lord” and making it “Appraise the Lord” seems like making fun of it, especially during Holy Week.
Again I am not accusing you of anything, just wanted to let you know that some people might find your title offensive. maybe more innocuous titles would be better in the future?
YoungHouseLove says
Hey Beth,
We certainly didn’t mean to offend! We’re just so thankful about our recent appraisal that the phrase “praise the Lord” came to mind… and the fact that it sounded a lot like “appraise” seemed to make it the perfect way to talk about how grateful we are for our home’s value after so much hard work!
xoxo,
Sherry
Melissa says
Congrats!!! =) That’s wonderful news!
Joan says
But, um, doesn’t that mean you’ll need to pay more in taxes? Or is this a different sort of appraisal?
YoungHouseLove says
Hey Joan,
Since the appraisal was conducted privately for the benefit of the loan company (to ensure that our house was worth investing in), it wasn’t released to the state… so our taxes shouldn’t budge! However, we have been advised to tell our homeowner’s insurance about the new value so they can adjust our coverage to ensure that the whole house is protected (after all the hard work we definitely want to be sure it’s covered). So our insurance may go up by a few dollars each month (it’s built into the mortgage so we should hardly notice it) but the peace of mind is well worth it! Hope it helps!
xo,
Sherry
ASHLEY says
We have spent well over 30,000 on our house and I don’t want to know what it’s worth until it’s time to sell. It really dosen’t mattter since we aren’t refinancing. Hopefully it will gain value over time, but it’s a place for us to live and not our retirement. If we knew what it was worth in this market we would probably stop renovating… and who wants to do that?!
Kim says
Hey Youngsters,
I was thinking about replacing all of the windows in my 60 year old home to new energy efficient ones. Do you have any advice or the expected cost for about 12 windows (3 of those one big living room window? And was it worth it when it came to bills, gas, electric?
Thanks!!!
YoungHouseLove says
Hey Kim,
After a few estimates and a hint from a neighbor, we ended up going with Window World (they’re a national chain that charges something like $179 per window- no matter the size). Of course there are hauling fees for the old windows and other charges built in for added perks (low-e and argon gas), so after it was all said and done we had 11 windows replaced for around $2700. Going with the low-e argon gas windows helps us to be as energy efficient as possible (they’re also a huge selling feature these days) and we’ve already noticed substantial savings when it comes to heating and cooling. Plus we got a tax write off for going for “green” windows! We used to have old drafty windows and it’s so nice not to feel the wind blow through out house anymore! Definitely worth the investment. Hope it helps!
xo,
Sherry
Ashley says
We are upgrading our house, project by project. We are looking to sell in 4 to 5 years. We are hoping to get some profit by ‘modernizing’ our 30+ year old home. Right now we have no idea what our return will be. Just crossing our fingers and saying a prayer. You two have done so much. I’m sure it will pay off once the market picks back up.
Molly says
Congratulations on that great news! We’re currently considering refinancing our home that we’ve been in for 6 years now. I’m excited to see what it appraises for! We havn’t done any major changes, but do have some smaller projects that I hope bodes well for us! Custom landscaping, custom plantation shutters in the front dining room, garage shelving, planted a tree, etc.
Kristy says
I hate to say this but the true appraisal only comes when you place your house on the market. Be it this market or the one of the future. It’s encouraging that the number was higher, but it’s discouraging that they have no comps to base your home on because its true value only comes in what someone is willing to pay. You may overimprove and never see the return if you keep going with large investments. You need to keep the values of homes in your neighborhood in mind too. I’ve learned that what I think might improve the property value is not what the neighborhood might support. I’m pretty sure you have some idea about what you are doing.
On the flip side I bought my house in April, have done some improvements and according to zillow.com the house has lost 16k in value due to the recession. Good thing houses are longterm investments and I’m in for the long haul.
YoungHouseLove says
Hey Kristy,
We’re definitely not the nicest house in the neighborhood! But since there are other larger and newer homes around us, they weren’t similar enough to our floor plan and our square footage to serve as true “comparables” on paper. But as more similar ranch homes around us get put up for sale with new kitchens and stuff in the future (we know many who have had work done but haven’t had their home appraised or sold so they’re “invisible” on paper), there will be more houses out there that can be considered on the same scale. At least that’s how we understand it. Does that make sense? But we know if we listed the house we’d be hard-pressed to get the new appraisal value these days! And the good news is that this is our forever house so we’re not worried about resale at all. Our plan is to stay here forever, and we’re just thankful that the house didn’t appraise super low cause it would have bummed us out!
xo,
s
bungalow_bliss says
Great news for you guys! I, too, am amazed at the changes you’ve been able to accomplish for that amount. I’m glad that, when the time comes for you to move, you’ll be seeing that come back to you. :-)
anneliese says
Congrats, guys! I personally love that tally time when you get to brag (even if it’s only to the appraiser) about all the hard work you’ve put into the house.
My favorite part (don’t know if your appraisal forms will have this, or if it’s peculiar to NM) was comparing the home’s upkeep (better than average, average, or below average) from the original sales appraisal to your new appraisal. Look for it in the section where they list the comparable properties, and I’m sure you’ll get a nice pat on the back for all the work you’ve done.
Ours went from below average to above average and I was thisclose to framing that section and sticking it on the mantel! When we finally finish this beast I may get a new appraisal for that validation alone.
Jenn says
We too are refinancing our ranch and just had our house appraised for 4k less than what we bought it for and we put about 20k in upgrades since we bought in 06.. BUT on the sunny side of things we are still able to do the refinance which will bring our monthly payment down $300! So Yippie!
Awesome for you guys though! I would be running around doing a happy dance if I were you!
Lyzz says
Hey guys. Just found your blog and absolutely loved it. So many great ideas!
I do have a question in that the $35,000 stated here includes the decorations to make it how it is, or just renovation work done to the house (i.e. windows, floors, gutting the kitchen, etc). I watch a lot of home renovation shows and I always wonder if the cost of such things as rug, sofas, etc are included in these numbers.
YoungHouseLove says
Hey Lyzz,
The 35K includes all the home improvements that actually went into transforming our house (no furniture included, but appliances and built in features like lighting and shelving are in there). Luckily we’re big fans of Target, West Elm, JC Penney, and other inexpensive superstores, so we didn’t have to break the bank when it came to decorating. We also love thrift stores and a bit of elbow grease to update super cheap (and even free!) finds to get more bang for our buck. Long live affordable home decor!
xoxo,
Sherry
Anna See says
Congrats! I know you’ll get back even more when the market improves.
Mandi Morris says
I just got my Spring 09 copy of The Nest. I recognized the three of you on the cover instantly. Loved the article! I’m in the midst of building a house so please keep the design ideas coming!!!
Molly says
I have a paint question- again. I’m the one with the paper sticking to the paint issues. Well, the paint I’m using is a satin finish just because that’s what it was already and I wanted to use the color. I’m wanting the boot tray to be a lacquered finish, high gloss. Can I do that just using the Minwax clear gloss stuff that you recommend? I’ve used 2 coats so far, do I just keep going if I want a glossier look? Or do I need to just get back the to the store and buy a high gloss paint?
YoungHouseLove says
Hey Molly,
If you have good coverage after two coats of the satin latex paint and just want more of a sheen, than using the water-based Minwax clear gloss is just the ticket. The key is to use very thin coats and allow them to thoroughly dry (and then set the boot tray aside for 48-72 hours before using it to ensure that it won’t get dented or scratched). Hope it helps!
xo,
s
Julie says
Your transformations are so inspiring!
We just sold our house and it appraised for $1100 over the asking price. In 4 years our house went up $35,000 in value and we only put about $15,000 into it. Other good news… our new house was appraised for $16,000 more than what we paid for it, so we’ve got built in equity and it’s pretty “vanilla” so anything we do to it will only help raise the bar.
Lyzz says
Also, while looking through your blog, I have a question outside of the appraisal issue. I see that you post a lot of pictures of your home and they are all beautiful. However, I was wondering if you actually live this way, meaning, is it always this clean and tidy? I feel like a lot of times, there’s good intention to keep it nice and clean and magazine picture perfect, but a bill here and there always find its way on my kitchen counter top and stays there for days. Just a thought.
YoungHouseLove says
Hey Lyzz,
I am truly a minimalist and I can honestly say that I can’t sit still and eat/watch TV/read a book unless everything’s in its place. To put it mildly: I’m an organizational freak. The key is actually having a place for everything so nothing is ever sitting around in limbo piling up. Having a system makes tidying up as you go a five minute time commitment per day. Literally. I think I clean/organize less than the average person since I never really let things get to the stage where it’s a major project to actually clean things up.
I once heard there are “pilers” and there are “filers” and I immediately identified that I was a “piler” (I used to have a pile of bills to pay, receipts to save, clothes to put away, etc). Now I have a place for these things (a white Ikea box on my desk for old receipts, a folder for bills to pay) so everything is still around, it’s just tucked out of sight! I also did a post about my favorite quick clean-up secret… a little hand vac with some serious suckage. I coast through the house in five minutes every few days and suck up any and all dust bunnies in the corner, under the kitchen cabinets, etc- it really helps keep things looking crisp between bigger vacuuming sessions and dusting sprees.
We also have strategically created little zones where things can easily be stashed, stored, and even displayed, like this mini mudroom that we made in the corner of our den. Having a storage bench and some hooks on the wall for purses, coats, scarves and even Burger’s leash keeps them from collecting elsewhere and causing chaotic clutter. Heck, we even have a bowl for John’s keys and wallet so there’s never any wondering about where they are. In short, we’re all about living in our home and not being a slave to the vacuum, but at the same time I find it infinitely more restful and rewarding when our house works hard for us- so we went the extra mile to create organization systems to help us keep things clean, neat, and ready for company at a moment’s notice. This is actually a great subject to expand upon so stay tuned for a post all about the organizing systems and clutter-free tips that work for us!
xoxo,
Sherry
Brandi says
Congrats! We bought a house December of 07, put about 5,000 into it and sold it this past March for 13,000 more than we bought it for. YA. plus…it sold in 4 days.
You’re house is too cute and can’t wait to see what you do in the challenge.
WilderMiss says
You forgot the new washer and dryer! I think I remember a post about you buying those when you got your dishwasher.
You two busy bees are such an inspiration. I mean, I’m adicted to your blog and I’m a renter!
Insert favorite renter joke: Home owners go to Home Depot on the weekends. I’m a renter, I got to Renter Depot. It’s just a bunch of people standing around saying, “I’m not fixing nothing!”
kristy says
Houses with more upgrades in our newer developement are selling for 30K LESS than we bought ours for at the top of the market. Needless to say, unless we find a GREAT deal on our dream home that more than negates the loss, we’re staying put for a while!
Lyzz says
This market is so depressing that I don’t even look at the value of our home. It’s one of those times that you just pray that your job stays put so that you can make the mortgage and ride through this bout of depression and hopefully come out of it with your head above the water.
Laura says
We are refinancing to take advantage of lower rates, so the appraisal is forthcoming!
Bella says
I just found your amazing blog and I am in for some time to read back on your old posts! What y’all have done is just inspiring. I truly admire your spirit of adventure and challenge!
http://www.southerness.blogspot.com
Shannon says
that’s great news, congrats! thanks for the links too, my fave project is your “built-ins” in your master, freakin ingenious!
Denise T. says
John and Sherry,
I reread your “recent finance” post and I want to commend both of you for being super savvy when it comes to home ownership. I’ve always been a fan of 15 year mortgages and the voluntary principal prepayment plan. Also, I think it is wise and healthy to upgrade your home according to your taste and style. As much as a home is an financial investment, it is also a place to express yourself and explore your creativity. I can’t think of anyone who does it better than the two of you, while sticking to a budget!!
Aimee says
Wow, very nice!
Our story: Due to my husband’s layoff and our subsequent decision to move across country, we have sold our home. Closing was last Tuesday. We bought the house in ’04 for $175k, and we put a fair amount of work in – nothing like you have, but more than the average couple. Last spring, when we refinanced, it appraised at $195k. With the downturn in the market, houses in our neighborhood have been selling for much less – a four bedroom (ours was a 3BR) in great shape sold in January for $182k. We were thrilled to get $186 for ours. As for the appraisal…I don’t know what kind of math this guy did, or where he got his comps, but it appraised for $199k!!! Dh and I were shocked. There is no way anyone would pay that for the house right now. Yes, I believe it deserves the number based on its own merit, but the market doesn’t support it. I guess the appraisal served its purpose, though, as the buyers’ agent was gloating and bragging about the deal he got his clients all through closing. As for us, we’re just happy to have gotten away without a short sale.
Kristin says
Thanks guys for the info you supplied above re: the windows. The house we just bought is about 90 years old (EEK!) and will definitely need new windows soon. Unfortunately the house has gobs of them, i mean maybe 30? Its a 2 story craftsman type. Anyway, hubby and I are worried about the cost of the windows.
Fred @ One Project Closer says
Congrats on the higher appraisal, certainly a rarity in this market!
Kellie Alkayam says
Mine appraised for $5000 less than what I paid, and that’s even with updating the wiring, remodeling the bathroom, etc. etc. But my payment went down about $300 and I still think my house is the best house in the world, so I’m pretty darn happy.
Summer Smith says
that is so great! Keep up the good work you crazy kids!
Anthony says
Hey Sherry/John,
Great news with the appraisal. Any increase in home value at this point is good news and since you’ve mentioned that you’re not looking to sell in the very short term, I’m sure you’ll see significant improvement in your home value when the time comes! We went through the same nervousness/excitement when we had our home appraised in Feb. for our refi and were also pleasantly surprised! At that time, we had invested about $30k into our home and our value, even in today’s market, had gone up $70k! We were able to pull some equity out and finish up some long awaited reno work! We (my wife and I) both enjoy following your blog and are determined to send you some before’s and afters soon!
ASHLEY says
Hey again. I was back reading the comments. Thanks for being honest about the true cost of replacement windows. As the daughter of a window salesman, I know that people are often fooled by the $99 replacement window. If your new window cost $99 than it’s not a very good window. So many of these companies say that the windows are cheap but then charge a fortune for window removal, reinstalling the trim etc. Also, vinyl replacement windows look great on some homes but out of place on others. An old Tudor with original wood casement windows would look funny with new replacement vinyl windows in my opinion. Sometimes custom storm windows can be a better option…
Julie says
I also want to thank you for the window information! When we bought our 35 year old rancher four years ago, one of the first things we looked into was replacing windows. We contacted two big box home improvement stores and wasted two evenings of our lives listening to sales presentations. Both estimates were over $13,000! For only 10 windows! We were so disappointed/flabbergasted that we shelved that project. But now that I know about some more options, we may be revisiting that project. Thanks!
CAROL S. says
Great post, loved the links, and had to take another peek at the royal bread post. fwiw, I took NO offense to the headline here on Easter Sunday from a devout Catholic, lol. You did a great job on that appraisal and if you’d invested that 35K in the stock market two years ago it would be worth about 60% of that now. Instead you enjoy the fruits of your labor every day! Can’t think of a better investment than that. Where we are from near Chicago, we purchased 15 years ago for what we thought then was a whopping $270K. We loved watching home prices in our area rise, to close to $550K for comparable homes. Now, they’re down to something like $400K, but we are mid-forties, not going anywhere real soon. You’ll see over the long haul your value will rise dramatically (we all hope) and you have the pleasure of enjoying your investment along the way.
sandy says
As a former realtor & someone who bought & sold 7 homes in southern California — upgrading your homes should be done because you will enjoy living with it. Many times, the buyers don’t like what you’ve done – and change it when they move in. Sales prices of homes are determined by the “market” and the location of the house within the tract & surrounding area.
Julie says
Gosh, you guys are all lucky you don’t live in CA. My house just appraised for about $200,000 less than what I paid for it 2 years ago :( Oh well, we are decorating anyway. Might as well live enjoy it – at least until we foreclose along with everyone else in our neighborhood!
Soleil Smith says
Sherry & John, my husband and I are the same way! Our mortgage is our only debt and it makes us sick. We want it gone as soon as possible and also want to be able to retire early. We have also been told that paying off your mortgage isn’t the best investment to make first with your money, but we just hate having debt.
We are about to refinance our mortgage for the 2nd time in the 1 1/2 hears we’ve been in the house so far. The first time we didn’t pay any closing costs but we had to pay some small fees and government taxes and we chose to buy down the rate which was rolled into our mortgage. I hated to start over back at our beginning loan amount, but we went ahead and payed it back down the next month with a huge overpayment. Now we are about to refinance again to a 15 year fixed instead of a 30 year (once again using a company with no closing costs) and I think our monthly payment is actually going down about $20.00. So that was “the biggest no brainer in the history of earth” as the ad says. I am absolutely giddy at the idea of taking 15 years time and interest off of our loan and hopefully we’ll be able to pay it off even sooner since we pay a little extra every month.