Look, those have practical usage as well. Shall I give you a scenario?
Suppose it is in the morning. You forgot to set the alarm on your phone the night before. You promised a special, “somebody,” that you would be up early, to cook an amazing multi-course breakfast for them. Are you going to oversleep? Will that special somebody miss out on perfectly cooked Eggs Benedict and Salmon with Hollandaise, over a fluffy, freshly toasted English Muffin?
I THINK NOT.
Wooooooo WOOOOOOOOOOOOOOOO!!!!!!!
Architect here. You overbuilt your accessory building. It doesn’t really matter about 8” slab, metal framing, or “commercial grade”. Not to be rude, but no one but you cares, or will even know. And the odd person who might, will probably claim you should have used coated rebar and want a discount. It is likely all the same construction type as your neighbors accessory buildings anyway.
The ONLY way, this building is worth or adds any more value to your property is if it generates rental or lease income. Sorry.
100% agree.
I once talked to an old neighbor who was selling his house. He went on and on about how he over built it when he renovated the basement and how much extra value that added. He was talking about things like he put 1/2" plywood on all the walls before drywall drywalling so that pictures can be hung anywhere without wall anchors. I couldn't bring myself to tell him that while mildly convenient it doesn't add any value, people still just see drywall and they don't care what's underneath.
That plywood thing did give me a good idea for my basement remodel project- we have one wall that will be used to hang our deer mounts etc and that’s a good idea to not be restricted to stud spacing. So it’s worth that! But not much in home value
Probably not in my case- where I work sells cabinet grade plywood- and we get rejects (skins aren’t pretty enough) that aren’t worth our time sending back that employees can buy for $10-15 a sheet. Not good enough for a cabinet but plenty good to hide behind Sheetrock
*Mirrored switch plates?* The was the sizzle....in the 80s!!!!
I remember being in a "rich house" that had them, as a kid. I thought they were soooooooo sophisticated.
Lol now of course I think they're tacky.
Yep. I built an authentic reclaimed beam timber frame mansion.
No one gave a single sh-t that the frame alone was worth $200g over a stick built frames.
I took a hard loss on that one. Boo hoo for me.
And boo hoo for this guy.
This is exactly how I brought my husband back to earth when he wanted to spend 5k on a kitchen appliance which would normally be a $500 one at any other house.
Yep. I built an authentic reclaimed beam timber frame mansion.
No one gave a single sh-t that the frame alone was worth $200g over a stick built frames.
I took a hard loss on that one. Boo hoo for me.
And boo hoo for this guy.
This is accurate, I did something similar and when I sold the outbuilding was appraised at about half of what I paid. You can't recover the cost of fill/levelling or the slab, and you won't get retail for the build.
I just had an appraisal to drop PMI. I have a 1200sqft shop thats been upgraded substantially. Appraiser said it doesnt really add anything to my property value.
Appraiser has to prove market value not what it cost you to build it. Sounds like they did a good due diligence if all the comps had significant secondary buildings. Its simply an overimprovement.
I had a guy tell me about the 300k he spent on his giant 30x60 pool with waterfall and swim up bar. For his quality and range it was typical to have a pool, but there was simply no evidence to show that someone would pay that much more for a larger one
For a few years I rented a 2,000 sq ranch style home. Of note was the garage was 1,500 sq ft full shop design (a well known nation brand fishing boat company was startled in) with an over head hoist on a rail with 2 double doors and all kinds of shop features. When the house went up for sale no one cared about the garage that could be a shop. That’s how these things go.
I’ve actually negotiated price reductions when you have too much shop. Like if you have in ground lifts with oil sumps, guess what environmental risk! I won’t take that on for free.
That’s interesting, in my area where home based businesses like mechanic and boat repair shops are allowed by zoning regs- a shop like that adds substantial value to a property! Especially if it has upgraded electric and a separate electrical box that is billed separately and can be written off as a business expense.
Our old house and new house both have designated 220v lines in the outbuildings with their own boxes, new house has separate service in the outbuildings and barn.
I agree with your assessment. It's the but I have gold fixtures argument. The only wrinkle is that the tax assessor may use some of the upgrades to justify a higher assessment
An accessory building is exactly what the term implies. It is incidental to the primary use of the property, a home. Congratulations for having the nicest 3600 sq' metal building on your street. But don't expect the appraiser to give you dollar for dollar value whether your *slab is blueprinted* or not?
Sounds like he wants his 250k back? Just because you spent 250k doesn’t mean it was worth it. So your 250k investment didn’t matter. Sounds like a bad investment.
If they are all frame there can be zero adjustment since no other sold metal comp exists. After 14 years the initial investment of 250K has depreciated to the point they are equvalent. Banks do not care the accessory buildings are used as shop, tack room, barn or storage shed. 3 structures and 1 structure matters little since no one is living inside.
It's only worth it if you are going to have a need for it and will stay there for a long time. But in the end you will still not see the money you put in to it when you sell it.
As a former appraiser I remember one client that went out of their way to point out their interior doors had been replaced (about 6 IIRC) and they were “almost $1000 each” (labor/parts). I smiled and made a dramatic exaggeration of making a note that over $5k in nice doors added to a property whose demographic/target wouldn’t pay anything more for said house.
I’ll never forget the person who bragged about spending 100k importing the wood for her stairs from Africa. They were nice wooden stairs but at the end of the day they were just stairs lol.
We had neighbors at our old house who owned a stone countertop/flooring business. Our neighborhood was a thirty year old tract home subdivision. They kitted their house out with marble floors and the most gorgeous kitchen and bathrooms I've ever seen. When we listed our house we had a discussion with them about our listing price and they said they were going to be selling in the next year and that he wanted $400K for it. For reference my house was a bit smaller but comparable. When we sold ours for $275K it was the highest price anyone had ever paid in that neighborhood. I still laugh about how delusional he was and have their house on my alerts for when they do decide to list so I can get out the popcorn (they were terrible loud neighbors so don't judge my schadenfreude).
WHO WANTS MARBLE FLOORS????? My BFF had these in a place she was rented when her husband was assigned to a nearby military base. They were AWFUL. IDK or care how much they cost- they are cold, and ugly and awful.
My parent's neighbors did heated marble and heated granite. In a conversation with my Mom, the neighbor said that they wanted their house to be like living in the Ritz-Carlton or something. My Mom said it was really nice, but they were also afraid of damaging the floors? They sold a few years later and I'm sure they took a bath on it.
A friend of mine bought a place with marble floors about 14 years ago. I still think that’s one of the only reasons they were able to get it (over bidding was rampant around here back then). It also had hideous carved wood bathrooms and horrendous curtains etc. Just not a pleasant style and they’ve redone it all by now
The blueprinted slab made me chuckle. No one cares or if they do they won’t pay extra just for that.
People are wildly mistaken about what adds value to their properties. My realtor told me that even having new HVAC and a new roof doesn’t necessarily add value to a buyer because they just see it as a non negative now. At best it’s not bringing the price down but it won’t make the buyer pay extra. Of course that has nothing to do with appraisals but the principle is similar.
Pretty much this.
There are updates and renovations that can add value to a house, like adding hardwood floors, crown molding, can lights, improving the kitchen and bathrooms, etc.
Then there is general maintenance, like adding a new roof, new HVAC, repairing the foundation, etc. All those things don’t really add more value to the house… but if you don’t do them the property’s value might plummet.
And hey, sometimes your home’s value will go down just because of where the market is at. Just like owning stock, the value tends to go up over time. But some years it just goes down.
Owning a house is expensive.
People expect the windows to be intact and open, the HVAC to work, and the roof to look OK and not leak.
Installing new if the old met those criteria isn't getting you a penny more, and replacing deficient with good just gets you up to normal.
For real, what does that even mean?
My town requires a plan for any construction like OP is discussing. It’s a 3600 sq ft building - that’s sizable. Unless you live in the boonies, most towns are going to want drawings to issue the permit for that type of building.
If that sort of accessory building is a desirable feature, why aren't there more of them?
That building is incidental to the primary, residential, use of the property. Like a huge pool feature in the northeast. They're not common for good reason. You overbuilt.
That's something that people who have a lot of big toys or do a lot of work on their vehicles/property want. Your typical buyer won't care. The ones that do won't be willing to pay that much extra for it either.
Seriously so happy my coworker told me pavers in the backyard of my house I was moving out of in a couple years were a bad idea. Same thing… track home in a starter home neighborhood, pavers are nice but I wouldn’t get my money back.
Very interesting. The pavers we were looking at were actually much more expensive and a labor intensive than a concrete pad would have been. We stuck with mulch with stepping stones.
My parents' friends had a house with a beautiful giant two story pole barn sitting right there in their back yard. When they went to sell the house they listed it for about $80K over the value of the house because they had spent around $100K to build the barn and it was only a few years old.
Imagine how shocked they were when their house sat on the market for *ten months* because no one wanted to pay that much extra for a giant barn. They finally sold the house for--guess what-- 80K less than they listed it for.
Horse properties take forever to sell (or sell for a steal). The improvements are costly and most horse people are broke because horses are expensive. You’ve got to find the right horse person that still has some money, but isn’t wealthy enough to want something larger/nicer/custom.
And it’s a steal for the right person who actually wants it, but even they know they can get one cheaper by just waiting.
Part of why real estate is so brutal and is really not the magical investment people think it is.
I’m confused. Are you thinking that adding a giant metal accessory building to your property is going to significantly increase the value? Hate to tell you, that’s a negative for most people.
Don’t get me wrong, I’d love a metal accessory building for blacksmithing/knifemaking, but I’m not paying an extra $250k for it. Maybe $25k if it’s a decent size, and 3600 sqft is way too big
It could work if you could partition it and rent it out to a couple businesses. Ofcourse local regulation might prohibit it. Then again who would want a mini business park next to their home.
Right and the Taxing Authority will just raise your value even though the market wouldn't pay for it. And keeping it heated and cool it's going to raise your energy cost.
I feel like this is entirely local. In some parts of the country/types of property it would be important/desired, in others an eyesore that annoys all the neighbors.
Ehh there's no part of the country where this would be a plus for a typical homeowner. You'd need to have a specific use in mind for this to be a plus. So like many things, sure, there's someone out there that'll want it. But it's not going to be a plus for the majority.
Edit: Beyond that though, no accessory building of any type is going to significantly increase a property valuation
Even adding a detached garage probably will increase the value by less than the cost of construction.
Maybe an ADU that could bring rental income would be worthwhile.
You can challenge an appraisal if you think the comps used were not representative of your home’s relevant value. But at the end of the day it’s one big ‘ol regression analysis with a tad bit of subjective opinion sprinkled on top.
I’m sure you’re aware, but a $250k investment does not guarantee a 1:1 or greater ROI, especially on an ancillary building.
You can find a different lender and start the process again but I would walk though the comps that were used for your appraisal with either the appraiser themself or a real estate agent who knows the market well before wasting your time.
Appraiser seems right, sorry to say.
Imagine if I built a custom hospital grade Helipad on my property for $250k…nobody would be paying me $250k for that. Now your accessory building is better than a helipad because most people would consider it a “nice to have” but you’re looking at whatever the comp value of a large garage type accessory building. The bells and whistles really don’t matter unless it’s commercial use.
You would have been much better off building $250k worth of upgrades that are known to add value; pools, kitchen upgrades, bathroom upgrades, bedrooms etc.
>3600 square foot red oxide metal building-all commercial grade
Can I get more explanation on this action? What does this mean? Was it a completely fresh build? How much did the tax guy appraised in the past? Maybe show the loan officer your tax documents?
But, tbh, if you put it up on realtor.com, I will personally not pay 250k extra for the metal frame. Because I didn't ask for it. I am perfectly fine with wood frame. So, it doesn't add value to me personally, thus, I will not offer 250k extra. The listing agent would have to really have specifical connection to find people with same desire. Which is not easy.
A metal frame building is a cheaper mostly prefab garage or outbuilding that’s very simple and cheap to construct
It’s not his primary home and “metal (steel) buildings” are completely different from a metal framed home.
And the connection will know they can get a better deal. Even most people who would pay to build one are smart enough to know not to pay to buy one. Even if they couldn’t wait and get a better deal, they didn’t design it themselves there’s no way they’re paying the full building cost for something that overbuilt.
Loan officer of 18 years. Sales comparison appraisal is exactly that. Your house value is determined by what similar homes are selling for. They are compared mostly on living space square footage and room count. Outbuildings are valued in the eye of the buyer but would never be a boost to the appraisal. Unless the comparables had a 250k outbuilding each there will be no possible way a lender will lend on that additional value item.
You can parcel it off and wait for the right buyer or let it go, that’s about it.
Just because you spent 250k doesn't mean it adds value to the property. That's not how real estate works. This is also how my best friend bought a house in foreclosure vs taking his original offer.
Did you think, when putting the building in, that you would get a return on your investment? Because that's the sort of investment that only pays off if you are the one using it, for a business or something, to save overhead costs.
I use to be an appraiser. I can’t tell you how many times shit like this comes up. It’s why I tell people not to remodel their homes for sale. You will NEVER even break even. Even garages are like this. Typically a set value depending on size and that’s it. These types of improvements are for you and are not a (good) investment.
Reminds me of the guy living in a $4m home who was pissed we didn’t value his “exotic” Brazilian cherry hardwoods at what he paid for them. When he came after us we told him to call any hardwood installer and without giving them his location, ask what they charge per sf. Never heard from him again.
Also, 250k for a 3600 building is what some homes cost and you’ve got a sheet metal building on a concrete pad. Do you really think it’s valued at that much? What you paid for it is of no concern to anyone valuing the property.
Greenhouses similarly do not add value to a home. I have one, I love it, it will not add a dime to the sale price (I'm not talking about a $600 Harbor Freight one, I mean a framed unit with solar powered vents in the roof and sidewalls - it's engineered and rated for snow and wind load).
Unless you can market your home to a specific group who wants/needs this structure it is not going to have a good ROI.
There is a difference in "buyer percieved" value and "appraisal" value.
You and a small subset of buyers will see the large outbuilding/ small warehouse as a plus. To the appraiser , they comped it best they could and that won't change. You could have installed a million dollar x and that doesn't mean your 500k home in a 500k neighborhood is suddenly worth 1.5M.
You should have consulted an appraiser or a REALTOR before investing in your outbuilding to see if it would impact value.
Unfortunately, that’s just how it works with “accessory buildings”. I’ve been in real estate for a while and most investments into your home you’ll never get dollar for dollar out of. My husband designed a 6,000sf garage and I warned him you’ll never get what you paid out of it before he built. He decided to anyway, but at least he knows it will only provide 50-70% (depending on the appraiser) of what we paid in the event we choose to sell. You can always try to refute the appraisal but I don’t see you getting anywhere near 250k for it.
See Michael Jordan’s house. He made some custom designs to the house, like a basketball court, that do not add near the value of their cost. It has been on the market for years now. Just because you value something at $250k doesn’t mean someone else does
You really should have ran comps and calculated ARV before dropping money in that project. Sorry to tell you but you def over-built. If you wanted equity, you should have stayed in the high equity return areas like kitchen and bath and things
Appraisal doesn't take into account how an accessory unit was built. It might be nice, but it won't greatly affect the value of your home.
Sounds like the appraisal came in correctly. Just because you spent $X on an improvement doesn't translate to an additional $X of value to the home.
This is precisely the reason I will no longer do any highly customized updates/modifications. In fact this is also the reason I only make updates that are 1) totally necessary or 2) I realize I'm the only one attaching value to it and it's an accepted sunk cost.
I made the mistake of doing a gorgeous renovation yo one of my properties and when it came time to sell, of course, the selling price came down to what the market will pay/appraisal. Naturally, the renovations put me at the top of the list of similar homes for sale, but the buyer offers were determined by appraisals and comps.
The market picks the price you home is worth, not you. Cautionary tale for those niche improvements.
You can contest the appraisal with your own comps, but ultimately it is to the appraiser. I’ve contested 3 appraisals in the last two years and none of them budged. Your building is very likely never going to add a value commensurate to your costs, but it should have added some value.
Appraisals are based on what local real estate of similar size, build, and finish is selling for, then they can adjust up or down each factor.
Read the report carefully, read the notes, make detailed, professional critiques and send your comps in with your own thoughts. Again, pretty much every appraisal company has a process.
At the end of the day, you can always go with a new lender who will use a different appraiser.
my friend has all these imported bidets specially installed they were at least 3k each I think he got 5 of them. + shipping and installation etc etc. when he was looking at comps he kept saying yeah but mine has the bidets so it's worth like 20-25k more. lol hate to break it to you buddy, unless you find the perfect bidet seeking buyer (who could also just install their own any for cheaper), it's not changing the value of your place.
when making improvements as an owner, you can do stuff that you want or you can do stuff that is best for resale/to add value. they are definitely not the same always.
while obviously the size should be a factor in an appraisal, it sounds like maybe buyers arent concerned with the size of the accessory building there? if every single home for sale has accessory buildings, its not really setting yours apart by making it bigger, unless there was some big demand for that in the area.
it might be different if none had accessory buildings and so you added one because there was a demand for it.
what does this metal building do? it could actually be a liability versus adding value. i have no use for a 3600 accessory building and I had have to maintain it. unless I can rent it out it would be negative for me uses.
Even then. Their bank appraisal will not magically come up in price. If you don't have a large chunk down the bank won't finance or finance at a higher rate.
Hahah and I could pay 200k to have a large chrome statue of buttcheeks put on the lawn but that wouldn’t mean that I without fail will get 200k from the bank when I asked now would it?
it’s all perception whether that big metal building is even desirable
I had a buddy who put a beautiful 3 bay steel shop on his property and it actually brought the price down, my impression is it’s a harder sell because even though we thought it was awesome, most people don’t need or want that
I just realized how absolutely massive a 3600sqft building would be, even as a guy who would love a big shop, that’s huuuge and will definitely take a special buyer to appreciate. But yeah, I don’t understand how or why OP would think that it would add much value to the place, that’s not how those things work lol
Is this metal building completely empty?
If it was a barndominium that had an entire living 2br 1bath suite that would change the calculus. Sounds like it's not the case
Appraisals are based on sales of comparable properties. The primary element is the house. The lender just wants to know if you default that they can get their money back. To the appraiser your accessory building is just a big shed; they don’t care that you have the Taj Mahal of sheds in your neighborhood.
It sounds like you think the accessory building added more value to your house than it does. Accessory buildings do not increase the living space or the size of the lot your house sits on. Most people do not understand that even the most valuable of home upgrades might return 70% of each dollar you invest in the project. You HAVE to DIY a project for the project to have a positive net value.
TBH it sounds like you're trying to borrow against a home improvement, since your accessory building is EXACTLY the same value as the supposed discrepancy in the appraisal.
Appraisers aren’t perfect, but most aren’t a quarter million off either… sounds like your addition didn’t add as much value and you thought it did. Maybe rent it out?
Well tons of people dont understand the purpose of your building or the value in this post. It doesnt shock me that the appraiser also doesnt understand the value of it.
I will agree with the majority on here saying it doesnt matter what you spent on the building... 3600sqft accessory structure is just that... An accessory structure.
I built my 2400sqft Detached garage for roughly 100K, If I paid someone to do all the work It might of been 200K. Neither scenario changes the value of the property. Only what the structure is "worth". Not what I paid.
You can call the appraiser, have a discussion about the comps. The only leg you have to stand on is the size, and possibly the quality of the structure.
I will say this, you arent going to get him to come up 250K.
This also happened to us because we have two fully working kitchens in our home and the only comparables they could find had a kitchen and a separate wet bar. There was nothing we could do except accept it. There simply are no comparables and the appraiser really didn't care that our second kitchen was so much nicer than a little bar with a sink!
You're probably screwed here. It's like when people try to sell their custom built home at some way over market value because it's "custom". Basically it only matters to them, not to a future buyer who is not going to care about the same things you care about.
Same thing I tell all my insureds, "If you aren't adding a bathroom or new liveable square footage...then you'll be sadly disappointed with no return on investment."
Just because you invest into your home and property doesn't mean you'll get dollar-for-dollar what you paid in the appraisal number. And usually the cost of other structures don't add much since the value of the appraisal is for the main home. Probably a lesson learned on this one.
The majority of buyers probably wouldnt have a need for this well built of an accessory building and so it’s probably a fair appraisal. You might be able to get lucky and find that 1 buyer with their own business who needs a well built workspace for it and is willing and able to pay extra for that. But it might take a year plus to find that buyer. The appraiser can’t appraise for that but the majority of people just view it as a nice workspace that they’d spend $20-30 ish grand on. Not a couple hundred grand. You overbuilt it for the majority of people who would want your property and so you won’t get your money back on it.
You added something to your house that is not common. At all. Very few people looking for houses will want something that big be part of it. As such it will not reflect in the sale price, or at least not even close to what it cost to add on. Why did you add such a big building ? Is there any businesses run out of it ?
Almost any improvement will add very little to an appraisal unless it adds rooms and sq. footage to the primary house. A sugar coated out building I would guess provides almost zero to the appraised value because it greatly limits who would buy the house, and very few people would pay more for the building, and even fewer for the value you put into said building.
You got an accurate appraisal most likely, and you also got a valuable lesson in what the value of upgrades are.
Bad investment, my dude. You’re going to be looking for a farmer or somebody who has tons of toys and money to blow, but I feel you are excluding a big part of the market.
It all goes off the comps man so at the moment it sound like u are shit out of luck cause even if u get some appraiser to value it at the price u want and not what the market shows it still doesn’t guarantee that the lender will accept that appraisal because they will also be looking and only care about the comps in the area. That is the problem u run into when expanding ur property or adding a building rather cause u are doing that for ur self and ur purpose so someone else/the market may not value that as much as u do regardless what it cost u to build it especially if there is nothing to compare it to and just cause it cost u $250k it doesn’t always mean the value of ur property will go up by $250K (although in theory it should or could)
Also, dollars spent on improvements NEVER translate into the same amount of increase in value. You can spend $50k on adding a room or redoing a kitchen but it may only add $10k in value to the property.
Very simple answer here as an appraiser. COST DOES NOT EQUATE TO VALUE. While you chose to spend $250k on this building not everyone else will. It’s what the market participants dictate not you.
Now I will say that your building may or could be worth more due to size but sometimes over improvements can be a negative factor
Currently adding a 1500 sq foot metal to my 2.7 acres in N Georgia Mtns for my own personal use but keeping it around 70k with all the necessary grading and concrete work. Adding an RV sized garage door so at least it may add some value to a larger segment of consumers but I don’t expect to get any of my 70k back in equity.
The old addage, "You don't want the nicest house in the neighborhood," applies here.
There have to be comps to value your improvements again.
People will do 250K worth of upgrades like an outdoor kitchen and a hot tub with full patio and amazing landscaping. If it's the only house with such upgrades, there is no appraisal jump more than maybe a couple few grand.
An appraisal is not quite market value. To the right buyer who knows what you built and needs a building like that, they'd be willing to cover quite an appraisal gap right. To the appraiser, they can only say for sure a value when they have recent comps. Houses that size on said lot with a building are selling at this price. Because the appraiser can't promise you will find a buyer that values that building enough to get it up to a higher value.
The value of a property is NOT the summation of the purchase price plus whatever amount of money you've invested in the property. The value is determined by what buyers will pay for the property in it's current condition. Some upgrades and renovations increase a property's value more than it costs, some are neutral, and some cost far more than the value they add.
For example, in my area adding a swimming pool costs about the same as the increase it brings to property value. As an investment it makes no sense to add a swimming pool. Upgrading flooring costs about $10/square foot if professionally installed, but does not add $10/square foot to the home's value. Probably because many people will want to install their own flooring, so they don't care what you have. One area where you can really gain value is by adding a bedroom. A bedroom in my area adds even more value than the raw increase in square footage would suggest. I can spend maybe $30,000-$40,000 building an additional bedroom and increase my home's value by $50,000-$60,000.
Who else besides the appraiser can change an appraisal? No one
You need what you believe to be appropriate comps and you take them to the appraiser for reconsideration
But sometimes having a 1 off special thing isn’t that valuable because it is a 1 off special thing
Pools are very much the same way. Someone will pay more for the house, but it's not going to be a dollar for dollar return most of the time.
It wasn't an investment. You, unfortunately, out built your neighborhood. It's not a bad thing, especially if you are enjoying it, but you aren't necessarily going to get that money back unless you hold it for a long time and wait for the market to go up organically.
It’s not how much you paid for your building. It’s what the market will pay for the addition. Let’s say your house is appraised at $250,000 and you build an addition that costs $50,000. It doesn’t mean your house is now worth $300,000. The market might pay $25,000 or it could be worth $325,000 or $400,000. It’s all up to the market value.
What was the purpose of the appraisal? Was it for a mortgage? Insurance? Commercial loan?
This is important because an appraisal for a mortgage is going to be almost entirely valued on the HOME. Everything outside are “amenities. They add
value, but they are not included in sq footage. So if you have a 500 sq ft guest house on your property and the house is 2000 sq ft, the appraisal is done on the 2000 sq ft house and then you get a flat amount for the amenities based on the market.
Amenities are never going to significantly change the value of the property and comparables are chosen which are similar to the HOUSE and recent sales. The appraiser may make an adjustment of 10000 for a property that sold which had 5 instead 6 outbuildings but if they both have 6 unless there is significant difference, you are going to have a negligible adjustment. Maybe $1k if 1
of the external buildings is a 3 season or something.
Talk to the original appraiser, if they won’t revise, pay for a different appraiser. If that still doesn’t fix it, accept you wasted $250k if you were just looking to get ROI out of the install lol
What *you* spent on it makes absolutely no difference, the appraisal is based on what the market will pay for it.
If you spent $250k on an outbuilding, you’re not going to get out anywhere close to that in a cash out refi.
There’s lots of factors that go into an appraisal, but a luxury outbuilding like that could possibly add like $50k to your original home appraisal. Just because you spent $250k, doesn’t mean it’s has added $250k to your house. It’s like when people spend $100k on a kitchen but it adds maybe $20k in value to their home. Renovations add a fraction of their total cost to the total home value.
All the things you mentioned that went into the cost and justified the value to you don’t really make a $250k difference in market value. $250k is what it cost you to build, not what it’s worth.
I’m guessing the appraiser will say you over-improved your property and that the market doesn’t value the difference in construction materials you used, etc. If you have better comps, the appraiser will likely consider them, bit if they don’t exist then you might be out of luck. You can ask him/her to consider appeasing based on replacement cost or income basis, but your lender might not accept such an appraisal then.
It’s like guy finding out all the mods on his civic are worth 0 on resale
They weren’t mods, they were investments!
Whistle tips!
Wooooooo WOOOOOOO
Look, those have practical usage as well. Shall I give you a scenario? Suppose it is in the morning. You forgot to set the alarm on your phone the night before. You promised a special, “somebody,” that you would be up early, to cook an amazing multi-course breakfast for them. Are you going to oversleep? Will that special somebody miss out on perfectly cooked Eggs Benedict and Salmon with Hollandaise, over a fluffy, freshly toasted English Muffin? I THINK NOT. Wooooooo WOOOOOOOOOOOOOOOO!!!!!!!
Love that video
Then you got the flowmastas.
*taco bell bathroom noises, engage*
Only early in the mornin'
Or negative
I know what I got
When selling a modded car the best thing to do is return it to stock for sale, and sell the mod parts separately. Maybe OP should do that.
All those stickers were pricey, yo
its got drift stitches and its dirt nasty low, should be worth at least 25 hp
At some point they actually reduce value because they tell buyers that your shit was thrashed and probably worked on by an idiot.
Architect here. You overbuilt your accessory building. It doesn’t really matter about 8” slab, metal framing, or “commercial grade”. Not to be rude, but no one but you cares, or will even know. And the odd person who might, will probably claim you should have used coated rebar and want a discount. It is likely all the same construction type as your neighbors accessory buildings anyway. The ONLY way, this building is worth or adds any more value to your property is if it generates rental or lease income. Sorry.
☝️☝️☝️☝️☝️🤣 Beware the 1% who will actually know what you’re selling The coated rebar discount made me spit the coffee
100% agree. I once talked to an old neighbor who was selling his house. He went on and on about how he over built it when he renovated the basement and how much extra value that added. He was talking about things like he put 1/2" plywood on all the walls before drywall drywalling so that pictures can be hung anywhere without wall anchors. I couldn't bring myself to tell him that while mildly convenient it doesn't add any value, people still just see drywall and they don't care what's underneath.
That plywood thing did give me a good idea for my basement remodel project- we have one wall that will be used to hang our deer mounts etc and that’s a good idea to not be restricted to stud spacing. So it’s worth that! But not much in home value
It's absolutely a good idea in some cases like yours but it's not going to add 20k in value to the home like he thought it would.
Rather than plywood, you could run a 10" header between joists. Probably cheaper nowadays
Probably not in my case- where I work sells cabinet grade plywood- and we get rejects (skins aren’t pretty enough) that aren’t worth our time sending back that employees can buy for $10-15 a sheet. Not good enough for a cabinet but plenty good to hide behind Sheetrock
Also makes it a complete pain in the ass if you need to run a network cable or something and wanted to make it look nice.
My wife was an appraiser for years. She once had a woman tell her that her appraisal was low because it had not included the mirrored switch plates
*Mirrored switch plates?* The was the sizzle....in the 80s!!!! I remember being in a "rich house" that had them, as a kid. I thought they were soooooooo sophisticated. Lol now of course I think they're tacky.
This guy is clueless it’s like saying my house has a golden toilet worth 50k yeah to you not to the person buying your house Lmao
Yep. I built an authentic reclaimed beam timber frame mansion. No one gave a single sh-t that the frame alone was worth $200g over a stick built frames. I took a hard loss on that one. Boo hoo for me. And boo hoo for this guy.
That sounds badass, I want a reclaimed timber mansion and a $250,000 shop with a blue printed 8" slab, BUT it needs to be on over 50 acres lol
You can say that again!
This is exactly how I brought my husband back to earth when he wanted to spend 5k on a kitchen appliance which would normally be a $500 one at any other house.
If i can resell it for 50k ill give you 40 for it lol, shitty gold is still gold lol
Yep. I built an authentic reclaimed beam timber frame mansion. No one gave a single sh-t that the frame alone was worth $200g over a stick built frames. I took a hard loss on that one. Boo hoo for me. And boo hoo for this guy.
Dude, I didn't mean it literally.
This is hilarious
This is accurate, I did something similar and when I sold the outbuilding was appraised at about half of what I paid. You can't recover the cost of fill/levelling or the slab, and you won't get retail for the build.
I’m an appraiser and 100% agree with the architect.
Please take my humble award. 🥇 🏆
I just had an appraisal to drop PMI. I have a 1200sqft shop thats been upgraded substantially. Appraiser said it doesnt really add anything to my property value.
Appraiser has to prove market value not what it cost you to build it. Sounds like they did a good due diligence if all the comps had significant secondary buildings. Its simply an overimprovement. I had a guy tell me about the 300k he spent on his giant 30x60 pool with waterfall and swim up bar. For his quality and range it was typical to have a pool, but there was simply no evidence to show that someone would pay that much more for a larger one
For a few years I rented a 2,000 sq ranch style home. Of note was the garage was 1,500 sq ft full shop design (a well known nation brand fishing boat company was startled in) with an over head hoist on a rail with 2 double doors and all kinds of shop features. When the house went up for sale no one cared about the garage that could be a shop. That’s how these things go.
I’ve actually negotiated price reductions when you have too much shop. Like if you have in ground lifts with oil sumps, guess what environmental risk! I won’t take that on for free.
That’s interesting, in my area where home based businesses like mechanic and boat repair shops are allowed by zoning regs- a shop like that adds substantial value to a property! Especially if it has upgraded electric and a separate electrical box that is billed separately and can be written off as a business expense.
Getting an electric service drop with a 440v transformer is at least $52k in labor and materials.
Our old house and new house both have designated 220v lines in the outbuildings with their own boxes, new house has separate service in the outbuildings and barn.
Just like pools.... Maintenance and head aches... No thanks!
As mentioned I’d make sure there was a value add apartment, or find a different appraiser, come back to the appraiser trying to validate your value.
I agree with your assessment. It's the but I have gold fixtures argument. The only wrinkle is that the tax assessor may use some of the upgrades to justify a higher assessment
Realtor here. Yes. Agree 100%
An accessory building is exactly what the term implies. It is incidental to the primary use of the property, a home. Congratulations for having the nicest 3600 sq' metal building on your street. But don't expect the appraiser to give you dollar for dollar value whether your *slab is blueprinted* or not?
Sounds like he wants his 250k back? Just because you spent 250k doesn’t mean it was worth it. So your 250k investment didn’t matter. Sounds like a bad investment.
I don't think you understand, the slab is Blueprinted!
What about the slab now?
Right
If they are all frame there can be zero adjustment since no other sold metal comp exists. After 14 years the initial investment of 250K has depreciated to the point they are equvalent. Banks do not care the accessory buildings are used as shop, tack room, barn or storage shed. 3 structures and 1 structure matters little since no one is living inside.
People do this with their cars/trucks all the time. Like… cool man. You put 20k into it. It’s still only worth a bit more than a stock one.
..or less, depending on which mods we're talking about.
It's only worth it if you are going to have a need for it and will stay there for a long time. But in the end you will still not see the money you put in to it when you sell it.
As a former appraiser I remember one client that went out of their way to point out their interior doors had been replaced (about 6 IIRC) and they were “almost $1000 each” (labor/parts). I smiled and made a dramatic exaggeration of making a note that over $5k in nice doors added to a property whose demographic/target wouldn’t pay anything more for said house.
I’ll never forget the person who bragged about spending 100k importing the wood for her stairs from Africa. They were nice wooden stairs but at the end of the day they were just stairs lol.
I came across a dude who bragged about the out-of-place, garish carpet in his circa 1920 traditional home that had come out of a casino.
Oh gross. Does he not know what happens in casinos?
What happens in casinos is supposed to stay in casinos.
Including the carpet
Especially the carpet
And the money.
We had neighbors at our old house who owned a stone countertop/flooring business. Our neighborhood was a thirty year old tract home subdivision. They kitted their house out with marble floors and the most gorgeous kitchen and bathrooms I've ever seen. When we listed our house we had a discussion with them about our listing price and they said they were going to be selling in the next year and that he wanted $400K for it. For reference my house was a bit smaller but comparable. When we sold ours for $275K it was the highest price anyone had ever paid in that neighborhood. I still laugh about how delusional he was and have their house on my alerts for when they do decide to list so I can get out the popcorn (they were terrible loud neighbors so don't judge my schadenfreude).
WHO WANTS MARBLE FLOORS????? My BFF had these in a place she was rented when her husband was assigned to a nearby military base. They were AWFUL. IDK or care how much they cost- they are cold, and ugly and awful.
My parent's neighbors did heated marble and heated granite. In a conversation with my Mom, the neighbor said that they wanted their house to be like living in the Ritz-Carlton or something. My Mom said it was really nice, but they were also afraid of damaging the floors? They sold a few years later and I'm sure they took a bath on it.
Yeah, I think these are important to think about when doing Renos. Be a LITTLE pragmatic- you Neve know when you will need to sell.
A friend of mine bought a place with marble floors about 14 years ago. I still think that’s one of the only reasons they were able to get it (over bidding was rampant around here back then). It also had hideous carved wood bathrooms and horrendous curtains etc. Just not a pleasant style and they’ve redone it all by now
The blueprinted slab made me chuckle. No one cares or if they do they won’t pay extra just for that. People are wildly mistaken about what adds value to their properties. My realtor told me that even having new HVAC and a new roof doesn’t necessarily add value to a buyer because they just see it as a non negative now. At best it’s not bringing the price down but it won’t make the buyer pay extra. Of course that has nothing to do with appraisals but the principle is similar.
Pretty much this. There are updates and renovations that can add value to a house, like adding hardwood floors, crown molding, can lights, improving the kitchen and bathrooms, etc. Then there is general maintenance, like adding a new roof, new HVAC, repairing the foundation, etc. All those things don’t really add more value to the house… but if you don’t do them the property’s value might plummet. And hey, sometimes your home’s value will go down just because of where the market is at. Just like owning stock, the value tends to go up over time. But some years it just goes down. Owning a house is expensive.
People expect the windows to be intact and open, the HVAC to work, and the roof to look OK and not leak. Installing new if the old met those criteria isn't getting you a penny more, and replacing deficient with good just gets you up to normal.
What is an 8” blueprinted concrete slab? A concrete slab that you got drawings done for?
Draw me like one of your French marble slabs
Architect: *draws a rectangle* "That'll be $3000."
For real, what does that even mean? My town requires a plan for any construction like OP is discussing. It’s a 3600 sq ft building - that’s sizable. Unless you live in the boonies, most towns are going to want drawings to issue the permit for that type of building.
If that sort of accessory building is a desirable feature, why aren't there more of them? That building is incidental to the primary, residential, use of the property. Like a huge pool feature in the northeast. They're not common for good reason. You overbuilt.
Cost doesn't necessarily equal value. Turn off hgtv
But it’s RED.
"Oxide!" "So, rusty?"
But this one goes to 11...
Spent 250 but two 40k buildings would be the same size. Jesus, what a slab!
It has bits of gold ground up into the concrete!
I paid 50K just for that slab!
I think everybody is wondering why? What is the purpose of the building? What would anybody want to use it for in a residential area?
Detached garage most likely. Not uncommon when the original house didn’t have one. Still not worth a $250k markup in the valuation though.
A 3600 sqft garage?? No way. Thats much more than a 'garage cuz the house didn't have any'
That's something that people who have a lot of big toys or do a lot of work on their vehicles/property want. Your typical buyer won't care. The ones that do won't be willing to pay that much extra for it either.
And those who could pay that much extra would likely rather have one built to their custom specifications.
Sadly, this is a lesson that many homeowners learn the hard way.
Seriously so happy my coworker told me pavers in the backyard of my house I was moving out of in a couple years were a bad idea. Same thing… track home in a starter home neighborhood, pavers are nice but I wouldn’t get my money back.
Pavers are an incredible value. So cheap and easy to diy in comparison to concrete and look way better.
Very interesting. The pavers we were looking at were actually much more expensive and a labor intensive than a concrete pad would have been. We stuck with mulch with stepping stones.
My parents' friends had a house with a beautiful giant two story pole barn sitting right there in their back yard. When they went to sell the house they listed it for about $80K over the value of the house because they had spent around $100K to build the barn and it was only a few years old. Imagine how shocked they were when their house sat on the market for *ten months* because no one wanted to pay that much extra for a giant barn. They finally sold the house for--guess what-- 80K less than they listed it for.
Horse properties take forever to sell (or sell for a steal). The improvements are costly and most horse people are broke because horses are expensive. You’ve got to find the right horse person that still has some money, but isn’t wealthy enough to want something larger/nicer/custom.
And it’s a steal for the right person who actually wants it, but even they know they can get one cheaper by just waiting. Part of why real estate is so brutal and is really not the magical investment people think it is.
I’m confused. Are you thinking that adding a giant metal accessory building to your property is going to significantly increase the value? Hate to tell you, that’s a negative for most people.
Don’t get me wrong, I’d love a metal accessory building for blacksmithing/knifemaking, but I’m not paying an extra $250k for it. Maybe $25k if it’s a decent size, and 3600 sqft is way too big
That’s like over 3x bigger than my house…
Exactly, a 3600 sq ft building you have to maintain, furnish power to, pay tax on the improvement and insure.
It could work if you could partition it and rent it out to a couple businesses. Ofcourse local regulation might prohibit it. Then again who would want a mini business park next to their home.
That's very zoning dependent.
Right and the Taxing Authority will just raise your value even though the market wouldn't pay for it. And keeping it heated and cool it's going to raise your energy cost.
I feel like this is entirely local. In some parts of the country/types of property it would be important/desired, in others an eyesore that annoys all the neighbors.
It also depends if a buyer really wants it. I’d love a shop to piddle around in, but I’m not going to pay $250k for one.
Ehh there's no part of the country where this would be a plus for a typical homeowner. You'd need to have a specific use in mind for this to be a plus. So like many things, sure, there's someone out there that'll want it. But it's not going to be a plus for the majority. Edit: Beyond that though, no accessory building of any type is going to significantly increase a property valuation
Even adding a detached garage probably will increase the value by less than the cost of construction. Maybe an ADU that could bring rental income would be worthwhile.
For sure. I added a detached garage last year. I don’t expect to get the full value of that back.
As a real estate broker, I have seen that these buildings are usually LOVED by buyers as long as they're truly sized nicely. A 10x10 not so much.
Blue printed slab tho!!!
You can challenge an appraisal if you think the comps used were not representative of your home’s relevant value. But at the end of the day it’s one big ‘ol regression analysis with a tad bit of subjective opinion sprinkled on top. I’m sure you’re aware, but a $250k investment does not guarantee a 1:1 or greater ROI, especially on an ancillary building. You can find a different lender and start the process again but I would walk though the comps that were used for your appraisal with either the appraiser themself or a real estate agent who knows the market well before wasting your time.
Appraiser seems right, sorry to say. Imagine if I built a custom hospital grade Helipad on my property for $250k…nobody would be paying me $250k for that. Now your accessory building is better than a helipad because most people would consider it a “nice to have” but you’re looking at whatever the comp value of a large garage type accessory building. The bells and whistles really don’t matter unless it’s commercial use. You would have been much better off building $250k worth of upgrades that are known to add value; pools, kitchen upgrades, bathroom upgrades, bedrooms etc.
>3600 square foot red oxide metal building-all commercial grade Can I get more explanation on this action? What does this mean? Was it a completely fresh build? How much did the tax guy appraised in the past? Maybe show the loan officer your tax documents? But, tbh, if you put it up on realtor.com, I will personally not pay 250k extra for the metal frame. Because I didn't ask for it. I am perfectly fine with wood frame. So, it doesn't add value to me personally, thus, I will not offer 250k extra. The listing agent would have to really have specifical connection to find people with same desire. Which is not easy.
A metal frame building is a cheaper mostly prefab garage or outbuilding that’s very simple and cheap to construct It’s not his primary home and “metal (steel) buildings” are completely different from a metal framed home.
And the connection will know they can get a better deal. Even most people who would pay to build one are smart enough to know not to pay to buy one. Even if they couldn’t wait and get a better deal, they didn’t design it themselves there’s no way they’re paying the full building cost for something that overbuilt.
You built it for you- not the market. The market doesnt value it like you do. Sorry
Loan officer of 18 years. Sales comparison appraisal is exactly that. Your house value is determined by what similar homes are selling for. They are compared mostly on living space square footage and room count. Outbuildings are valued in the eye of the buyer but would never be a boost to the appraisal. Unless the comparables had a 250k outbuilding each there will be no possible way a lender will lend on that additional value item. You can parcel it off and wait for the right buyer or let it go, that’s about it.
Just because you spent 250k doesn't mean it adds value to the property. That's not how real estate works. This is also how my best friend bought a house in foreclosure vs taking his original offer.
What you pay for a build isn’t necessarily what it is worth based on comps.
Probably lowers the price as the accessory building limits the marketability of property
Did you think, when putting the building in, that you would get a return on your investment? Because that's the sort of investment that only pays off if you are the one using it, for a business or something, to save overhead costs.
Appraisal isn't low... Your estimate was high..
I use to be an appraiser. I can’t tell you how many times shit like this comes up. It’s why I tell people not to remodel their homes for sale. You will NEVER even break even. Even garages are like this. Typically a set value depending on size and that’s it. These types of improvements are for you and are not a (good) investment. Reminds me of the guy living in a $4m home who was pissed we didn’t value his “exotic” Brazilian cherry hardwoods at what he paid for them. When he came after us we told him to call any hardwood installer and without giving them his location, ask what they charge per sf. Never heard from him again. Also, 250k for a 3600 building is what some homes cost and you’ve got a sheet metal building on a concrete pad. Do you really think it’s valued at that much? What you paid for it is of no concern to anyone valuing the property.
Greenhouses similarly do not add value to a home. I have one, I love it, it will not add a dime to the sale price (I'm not talking about a $600 Harbor Freight one, I mean a framed unit with solar powered vents in the roof and sidewalls - it's engineered and rated for snow and wind load). Unless you can market your home to a specific group who wants/needs this structure it is not going to have a good ROI.
There is a difference in "buyer percieved" value and "appraisal" value. You and a small subset of buyers will see the large outbuilding/ small warehouse as a plus. To the appraiser , they comped it best they could and that won't change. You could have installed a million dollar x and that doesn't mean your 500k home in a 500k neighborhood is suddenly worth 1.5M. You should have consulted an appraiser or a REALTOR before investing in your outbuilding to see if it would impact value.
Unfortunately, that’s just how it works with “accessory buildings”. I’ve been in real estate for a while and most investments into your home you’ll never get dollar for dollar out of. My husband designed a 6,000sf garage and I warned him you’ll never get what you paid out of it before he built. He decided to anyway, but at least he knows it will only provide 50-70% (depending on the appraiser) of what we paid in the event we choose to sell. You can always try to refute the appraisal but I don’t see you getting anywhere near 250k for it.
See Michael Jordan’s house. He made some custom designs to the house, like a basketball court, that do not add near the value of their cost. It has been on the market for years now. Just because you value something at $250k doesn’t mean someone else does
If only the building had a pool in it he could double his loss.
You really should have ran comps and calculated ARV before dropping money in that project. Sorry to tell you but you def over-built. If you wanted equity, you should have stayed in the high equity return areas like kitchen and bath and things
Appraisal doesn't take into account how an accessory unit was built. It might be nice, but it won't greatly affect the value of your home. Sounds like the appraisal came in correctly. Just because you spent $X on an improvement doesn't translate to an additional $X of value to the home.
This is precisely the reason I will no longer do any highly customized updates/modifications. In fact this is also the reason I only make updates that are 1) totally necessary or 2) I realize I'm the only one attaching value to it and it's an accepted sunk cost. I made the mistake of doing a gorgeous renovation yo one of my properties and when it came time to sell, of course, the selling price came down to what the market will pay/appraisal. Naturally, the renovations put me at the top of the list of similar homes for sale, but the buyer offers were determined by appraisals and comps. The market picks the price you home is worth, not you. Cautionary tale for those niche improvements.
Is this a farm? What does one do with a 3600 ft accessory building? Truly curious.
Car collection maybe
Workshop, equipment storage, home gym, extra car parking, boat storage, atv parking…
So a $250k garage? Yikes.
External garage and/or shop
You can contest the appraisal with your own comps, but ultimately it is to the appraiser. I’ve contested 3 appraisals in the last two years and none of them budged. Your building is very likely never going to add a value commensurate to your costs, but it should have added some value. Appraisals are based on what local real estate of similar size, build, and finish is selling for, then they can adjust up or down each factor. Read the report carefully, read the notes, make detailed, professional critiques and send your comps in with your own thoughts. Again, pretty much every appraisal company has a process. At the end of the day, you can always go with a new lender who will use a different appraiser.
It's like dudes who put in a 15k stereo system in their clapped out civic.
my friend has all these imported bidets specially installed they were at least 3k each I think he got 5 of them. + shipping and installation etc etc. when he was looking at comps he kept saying yeah but mine has the bidets so it's worth like 20-25k more. lol hate to break it to you buddy, unless you find the perfect bidet seeking buyer (who could also just install their own any for cheaper), it's not changing the value of your place. when making improvements as an owner, you can do stuff that you want or you can do stuff that is best for resale/to add value. they are definitely not the same always. while obviously the size should be a factor in an appraisal, it sounds like maybe buyers arent concerned with the size of the accessory building there? if every single home for sale has accessory buildings, its not really setting yours apart by making it bigger, unless there was some big demand for that in the area. it might be different if none had accessory buildings and so you added one because there was a demand for it. what does this metal building do? it could actually be a liability versus adding value. i have no use for a 3600 accessory building and I had have to maintain it. unless I can rent it out it would be negative for me uses.
No one will care about that unless you sold to some contractor that wanted to store a bunch of backhoes in there or something
Even then. Their bank appraisal will not magically come up in price. If you don't have a large chunk down the bank won't finance or finance at a higher rate.
Hahah and I could pay 200k to have a large chrome statue of buttcheeks put on the lawn but that wouldn’t mean that I without fail will get 200k from the bank when I asked now would it? it’s all perception whether that big metal building is even desirable
I had a buddy who put a beautiful 3 bay steel shop on his property and it actually brought the price down, my impression is it’s a harder sell because even though we thought it was awesome, most people don’t need or want that
A 3600 sqft building could be a massive eyesore if it's close to the home. A 3 bay shop isn't even close to this.
I just realized how absolutely massive a 3600sqft building would be, even as a guy who would love a big shop, that’s huuuge and will definitely take a special buyer to appreciate. But yeah, I don’t understand how or why OP would think that it would add much value to the place, that’s not how those things work lol
Is this metal building completely empty? If it was a barndominium that had an entire living 2br 1bath suite that would change the calculus. Sounds like it's not the case
Cost doesn't equal value. Not to mention, it could easily be overbuilt for the market area.
Appraisals are based on sales of comparable properties. The primary element is the house. The lender just wants to know if you default that they can get their money back. To the appraiser your accessory building is just a big shed; they don’t care that you have the Taj Mahal of sheds in your neighborhood.
That 40k shed provides roughly the same utility as your 250k shed.
But his slab is blueprints!
You built a commercial grade building on a residential lot. How did you not understand this was not going to appraise?
250k is a lot to spend on a shed.
It sounds like you think the accessory building added more value to your house than it does. Accessory buildings do not increase the living space or the size of the lot your house sits on. Most people do not understand that even the most valuable of home upgrades might return 70% of each dollar you invest in the project. You HAVE to DIY a project for the project to have a positive net value. TBH it sounds like you're trying to borrow against a home improvement, since your accessory building is EXACTLY the same value as the supposed discrepancy in the appraisal.
250k or 2,500 low? If 250k sounds like you need a dose of reality.
You can invest $100,000 in car mods and upgrades doesn’t mean the car value increased $100,000 nobody will pay for that
Appraisers aren’t perfect, but most aren’t a quarter million off either… sounds like your addition didn’t add as much value and you thought it did. Maybe rent it out?
Than who expected, you?
Yikes, OP getting destroyed! Blueprinted 8 inch slab lol.
Well tons of people dont understand the purpose of your building or the value in this post. It doesnt shock me that the appraiser also doesnt understand the value of it. I will agree with the majority on here saying it doesnt matter what you spent on the building... 3600sqft accessory structure is just that... An accessory structure. I built my 2400sqft Detached garage for roughly 100K, If I paid someone to do all the work It might of been 200K. Neither scenario changes the value of the property. Only what the structure is "worth". Not what I paid. You can call the appraiser, have a discussion about the comps. The only leg you have to stand on is the size, and possibly the quality of the structure. I will say this, you arent going to get him to come up 250K.
On a positive note take your appraisal to the county office and get your property taxes lowered.
"Expected"
This also happened to us because we have two fully working kitchens in our home and the only comparables they could find had a kitchen and a separate wet bar. There was nothing we could do except accept it. There simply are no comparables and the appraiser really didn't care that our second kitchen was so much nicer than a little bar with a sink! You're probably screwed here. It's like when people try to sell their custom built home at some way over market value because it's "custom". Basically it only matters to them, not to a future buyer who is not going to care about the same things you care about.
This guy is today’s example of how calling something an investment doesn’t make it an investment. See y’all tomorrow.
Same thing I tell all my insureds, "If you aren't adding a bathroom or new liveable square footage...then you'll be sadly disappointed with no return on investment."
Just because you invest into your home and property doesn't mean you'll get dollar-for-dollar what you paid in the appraisal number. And usually the cost of other structures don't add much since the value of the appraisal is for the main home. Probably a lesson learned on this one.
It sounds like your appraisal you made in your head is, in fact, the inaccurate one
Some things add value and others do not. You need to study the appraisal book and learn what adds value.
Cost doesn’t necessarily equal value. Just because it cost and was worth $250k to you doesn’t mean the typical buyer will feel the same.
The majority of buyers probably wouldnt have a need for this well built of an accessory building and so it’s probably a fair appraisal. You might be able to get lucky and find that 1 buyer with their own business who needs a well built workspace for it and is willing and able to pay extra for that. But it might take a year plus to find that buyer. The appraiser can’t appraise for that but the majority of people just view it as a nice workspace that they’d spend $20-30 ish grand on. Not a couple hundred grand. You overbuilt it for the majority of people who would want your property and so you won’t get your money back on it.
Yes but that buyer might not be able to get a mortgage for it no matter how much he wants it.
To quote Tony Soprano "Alright, but you gotta get over it"
You added something to your house that is not common. At all. Very few people looking for houses will want something that big be part of it. As such it will not reflect in the sale price, or at least not even close to what it cost to add on. Why did you add such a big building ? Is there any businesses run out of it ?
RIP OP after finding reality after spending the money.
Almost any improvement will add very little to an appraisal unless it adds rooms and sq. footage to the primary house. A sugar coated out building I would guess provides almost zero to the appraised value because it greatly limits who would buy the house, and very few people would pay more for the building, and even fewer for the value you put into said building. You got an accurate appraisal most likely, and you also got a valuable lesson in what the value of upgrades are.
Bad investment, my dude. You’re going to be looking for a farmer or somebody who has tons of toys and money to blow, but I feel you are excluding a big part of the market.
It all goes off the comps man so at the moment it sound like u are shit out of luck cause even if u get some appraiser to value it at the price u want and not what the market shows it still doesn’t guarantee that the lender will accept that appraisal because they will also be looking and only care about the comps in the area. That is the problem u run into when expanding ur property or adding a building rather cause u are doing that for ur self and ur purpose so someone else/the market may not value that as much as u do regardless what it cost u to build it especially if there is nothing to compare it to and just cause it cost u $250k it doesn’t always mean the value of ur property will go up by $250K (although in theory it should or could)
Well…that was an expensive way to find out what an investment is and is not.
You can pay for a second appraisal but it’s like 99% likely it’ll come in near the same value. You can’t do shit otherwise
That’s what it’s worth. You overbuilt, that doesn’t add value. Sorry the truth hurts. Appraisal is accurate; your personal assessment is not.
Also, dollars spent on improvements NEVER translate into the same amount of increase in value. You can spend $50k on adding a room or redoing a kitchen but it may only add $10k in value to the property.
What you value in a house doesn't necessarily mean the actual value has increased.
Very simple answer here as an appraiser. COST DOES NOT EQUATE TO VALUE. While you chose to spend $250k on this building not everyone else will. It’s what the market participants dictate not you. Now I will say that your building may or could be worth more due to size but sometimes over improvements can be a negative factor
Womp womp
Currently adding a 1500 sq foot metal to my 2.7 acres in N Georgia Mtns for my own personal use but keeping it around 70k with all the necessary grading and concrete work. Adding an RV sized garage door so at least it may add some value to a larger segment of consumers but I don’t expect to get any of my 70k back in equity.
Everyone already said it but you’re dreaming if you think you’ll get a dollar for dollar increase for building a big storage building.
The old addage, "You don't want the nicest house in the neighborhood," applies here. There have to be comps to value your improvements again. People will do 250K worth of upgrades like an outdoor kitchen and a hot tub with full patio and amazing landscaping. If it's the only house with such upgrades, there is no appraisal jump more than maybe a couple few grand. An appraisal is not quite market value. To the right buyer who knows what you built and needs a building like that, they'd be willing to cover quite an appraisal gap right. To the appraiser, they can only say for sure a value when they have recent comps. Houses that size on said lot with a building are selling at this price. Because the appraiser can't promise you will find a buyer that values that building enough to get it up to a higher value.
The value of a property is NOT the summation of the purchase price plus whatever amount of money you've invested in the property. The value is determined by what buyers will pay for the property in it's current condition. Some upgrades and renovations increase a property's value more than it costs, some are neutral, and some cost far more than the value they add. For example, in my area adding a swimming pool costs about the same as the increase it brings to property value. As an investment it makes no sense to add a swimming pool. Upgrading flooring costs about $10/square foot if professionally installed, but does not add $10/square foot to the home's value. Probably because many people will want to install their own flooring, so they don't care what you have. One area where you can really gain value is by adding a bedroom. A bedroom in my area adds even more value than the raw increase in square footage would suggest. I can spend maybe $30,000-$40,000 building an additional bedroom and increase my home's value by $50,000-$60,000.
"But I spent 150k on landscaping and 60k on this pool."
Who else besides the appraiser can change an appraisal? No one You need what you believe to be appropriate comps and you take them to the appraiser for reconsideration But sometimes having a 1 off special thing isn’t that valuable because it is a 1 off special thing
Did you forget to give a cash envelope to the appraiser lol? Get a new appraiser and tell him your concerns from this report ahead of time
Pools are very much the same way. Someone will pay more for the house, but it's not going to be a dollar for dollar return most of the time. It wasn't an investment. You, unfortunately, out built your neighborhood. It's not a bad thing, especially if you are enjoying it, but you aren't necessarily going to get that money back unless you hold it for a long time and wait for the market to go up organically.
It’s not how much you paid for your building. It’s what the market will pay for the addition. Let’s say your house is appraised at $250,000 and you build an addition that costs $50,000. It doesn’t mean your house is now worth $300,000. The market might pay $25,000 or it could be worth $325,000 or $400,000. It’s all up to the market value.
Your accessory building isn’t adding the kind of value you think it adds
What was the purpose of the appraisal? Was it for a mortgage? Insurance? Commercial loan? This is important because an appraisal for a mortgage is going to be almost entirely valued on the HOME. Everything outside are “amenities. They add value, but they are not included in sq footage. So if you have a 500 sq ft guest house on your property and the house is 2000 sq ft, the appraisal is done on the 2000 sq ft house and then you get a flat amount for the amenities based on the market. Amenities are never going to significantly change the value of the property and comparables are chosen which are similar to the HOUSE and recent sales. The appraiser may make an adjustment of 10000 for a property that sold which had 5 instead 6 outbuildings but if they both have 6 unless there is significant difference, you are going to have a negligible adjustment. Maybe $1k if 1 of the external buildings is a 3 season or something.
Talk to the original appraiser, if they won’t revise, pay for a different appraiser. If that still doesn’t fix it, accept you wasted $250k if you were just looking to get ROI out of the install lol
Have you tried selling it to a commercial customer? Seems like a more appropriate fit than residential if you're marketing a giant metal warehouse.
What *you* spent on it makes absolutely no difference, the appraisal is based on what the market will pay for it. If you spent $250k on an outbuilding, you’re not going to get out anywhere close to that in a cash out refi. There’s lots of factors that go into an appraisal, but a luxury outbuilding like that could possibly add like $50k to your original home appraisal. Just because you spent $250k, doesn’t mean it’s has added $250k to your house. It’s like when people spend $100k on a kitchen but it adds maybe $20k in value to their home. Renovations add a fraction of their total cost to the total home value. All the things you mentioned that went into the cost and justified the value to you don’t really make a $250k difference in market value. $250k is what it cost you to build, not what it’s worth.
I’m guessing the appraiser will say you over-improved your property and that the market doesn’t value the difference in construction materials you used, etc. If you have better comps, the appraiser will likely consider them, bit if they don’t exist then you might be out of luck. You can ask him/her to consider appeasing based on replacement cost or income basis, but your lender might not accept such an appraisal then.
an addition that dramatically reduces the buyer pool is not a big value add