I have met a lot of people that have a misconception on the value of upgrades on a house. They see shows on cable TV that shows them adding granite counter tops, wood floors, new deck and so on. On the show, these items increase the value of the house more than the cost of the items being installed. The difference between them and the people I have talk to is, they are fixing up the ugly house in a nice neighborhood. In that case the homeowner might get all the money spent back out of the house. However, if you put too many upgrades you might be “out doing the neighborhood.” Meaning, when your REALTOR and appraiser price your home they will be looking at your house compared to the other homes in the neighborhood. They will compare; square footage, location, age, and upgrades. If you are the only house with granite counter tops and wood floors, in the area, it will add little to the value of the house.

 

In my opinion, upgrades are an excellent selling feature. When buyers go to your house and you have real title, stainless steal appliances, new paint, etc. and you will probably be on the top of their list as long as your price is comparable to the other homes in the neighborhood.

 

Another problem with thinking that upgrades increase the value of the house is, the inflating the price to the point where the buyer’s bank won’t lend on the house. Example: you get an offer for your asking price of 150K (because the buyer real loves the upgrades) and the bank appraisal comes in for less than 150K than either you will have to come down to the bank’s appraisal or the buyer has to pay for the difference. Chances are you will have to come down in price. 

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