A new statistical study published in the Journal of Housing Economics and a study that syncs with Quicken Loans found that there is a widening gap by the average homeowner between what the homeowner actually thinks what his/her home is worth & actual market value, erroneous estimations of their capital gains, and/or over estimations when a homeowner applies for refinancing and the home is appraised for the qualification of the loan product.
So where do we err when it comes to the valuation of our asset?
1. Unrealistic expectations of how much improvements actually add to the valuation of the property. In a 2015 “Cost vs. Value” study by Remodeling Magazine & member of the National Association of Realtors found that many high ticket improvements don’t come close to paying off what they cost, Example; a major kitchen project could return 67.8% in resale value. A back up power generator-57.8%
2. Another issue is the “over-improvement” of the home in comparison to you neighbors/neighborhood. When you renovate to the level that the other homes in your neighborhood do not share in you will not recoup that extra expense/but you will enjoy the improvement while still residing in the home.
So if you really want to know what your home is worth please speak to a reputable REALTOR(tm) (or a few) who will perform a true valuation of your property in terms of what has sold & what is currently on the market within your area or hire a licensed appraiser who will perform an independent valuation.