Pricing your home for market is an inexact science but we have many sources from which to draw to get as accurate a price as possible. Many times the question is asked “Can we get back all the money we’ve put into our home?” The answer is a definite “well, that depends.” It depends on the following…
- When were the improvements made?
- At that time were you planning to sell or stay?
- If you had known then that you were going today, would you still have made improvements?
- If the improvements were removed, what percent of today’s buyers would put them back and pay what you did?
Another related question is, “Shouldn’t I expect to get back what I put into it?” And that also depends. Let’s say a builder built a $500,000 home on a lot and included a well that cost $20,000. Then a similar home was built on the next lot but the well went through harder rock and to a deeper water table costing the builder $40,000.00. How much is the home worth? $500,000. Even though the cost of building it was an additional $20,000.
According to the principle of substitution, value is determined not by what a seller puts in a home, but by what a buyer gets out of the home. In both cases they get water.