How much does a Pool add to my property value?
Appraiser’s Secrets: How Much Is That Worth?
When going to sell a home, many people wonder how much an amenity like a pool or water frontage adds to their value. Often, many are then disappointed if they assume the cost to build a pool or a dock translates to market value. Eek! It doesn’t! Just like any aspect of the home, there is no magic number added per additional feature, and it absolutely does not matter what was paid to have it built originally. It matters what was sold in your market and for how much.
Your market would be what appraisers call a neighborhood. But don’t get neighborhood confused with your subdivision. A neighborhood is simply an area searched that contains the best available comparable sales.
Second of all, an appraisal is a licensed appraiser’s opinion of value. That’s important to know. It’s not your house cost per square foot. If that were the case, there would be no need for appraisers. It would be a matter of addition. The appraisal is truly an opinion but always backed up with logic after thorough research, analysis, and evaluation. It’s important to realize that though subjective, appraisals are solid conclusions not just pulled out of thin air.
In the case of a pool, an appraiser must analyze the available sales within a market comparable to that of the subject. To do so, he or she must gather the sale of homes with swimming pools and those without pools. Then, the appraiser would analyze the discrepancy between the sold price of sales with and without a pool. This same technique called a Sales Comparison Approach to Value, is applied to any additional feature.
As a result, a reasonable approximation of the contributory value of the swimming pool is thus decided. That value is then adjusted for in the Sales Comparison Analysis of comparable sales that ultimately decide the appraiser’s opinion of value.
Just like everything else in the appraisal, a pool’s value is based on the market... not the cost to build. Seems strange to us, but remember, not everyone even wants a pool, and the market reflects that!
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