OK, I need to vent a little here! I’m not going to apologize. I’m just going to put this post out there and feel better!
So – we just completed a HUGE renovation in Plano, fully renewing a ranch-style home not just to its former glory, but to a BETTER place than it was when it was first built. We took it down to the studs, constructed it back to today’s (much tougher) building codes, opened the space up, changed the flow through the home and modernized everything in there. It took us 6 months. It cost a LOT of money. You can see the story in another of my blogs, and there are photos of the end result on our Home page as well as in our Gallery. The home is truly is spectacular, and was completely worth all the effort – blood, sweat AND tears went into this one!
Of course the house sold within a week of being on the market, to a buyer who absolutely LOVES it and who deserves to own it and live in it. We had thought we might live there ourselves many times during the project. So why do I need to vent? Because I am FED UP with home appraisers, appointed by the banks, telling us that setting a new bar for renovations and renewals is a BAD thing! “It’s all about the comps” is all I hear these days – and unfortunately for us, that’s what I hear EVERY TIME we do a full renewal. So what is a “comp”, and why is it so important?
“Comps” – real estate slang for “comparables” – are well defined. They are “the pieces of data and information from homes of similar size, condition, age, and style that recently sold in a certain neighborhood.” This information is often used in a comparative market analysis or appraisal to help determine the fair market value for a home. Let’s read those words again VERY carefully …. “similar size, CONDITION, age and style that recently sold IN THE NEIGHBORHOOD.”
In practice, it’s just a report that appraisers and realtors produce, which tells them the address, size, age and configuration of each sold property, and the selling price achieved – which then gets reduced to a “price per square foot” number. And right there is where they all get twisted up …..
When we do a renewal in a neighborhood, what do you think happens to the “price per square foot” of the home we are working on? It goes up, right? But as you know, and as you can see from the photos and blogs, these are not normal renovations. They are RENEWALS. Updating homes (giving them new kitchens, new bathrooms, new floors and so on) brings their value up to the highest “comp” – they reach the same level as the other updated ones in the neighborhood. BUT we are making our homes better than they were originally! So where do you think the price per square foot should be? HIGHER than the highest comp, right?
That’s perfectly logical. If you increase the quality of a home, beyond that of the local updated ones, you set a new bar in terms of price per square foot. If you spend money renewing the sewer line during a renewal, and everyone else in the neighborhood knows they will eventually need to replace theirs as well, then your home is worth more, because it’s already been done! If your electrics are fully renewed, that’s a lot of money that, eventually, everyone else will need to spend as well, but you don’t have to – it’s already been done!
But that isn’t the response we get from home appraisers. Here’s what I hear, more or less word for word ….. “If you spend too much on a renovation, you won’t get the money back when you sell, because your price per square foot will be too high. You can only ever get the highest price per square foot that has already been achieved in the neighborhood, so if you spend more than that on a renovation, you’re stupid!”.
“Stupid” – defined as “having or showing a great lack of intelligence or common sense”. So it’s not intelligent to improve the quality of a home beyond that of the ones that are already there, because nobody understands that you have to pay a little more for high quality work. It’s not common sense that neighborhoods may develop over time, but that houses that are in them may decline with wear and tear, so need to be renewed after 40 years. It’s not smart to show the neighbors what the place might look like if everybody pulled themselves up by the boot straps to a new level. And it’s certainly not worth thinking that renewing a home might, just MIGHT, mean that the price per square foot statistics that have been achieved so far could, perhaps, go UP?
Renewing homes is good for the neighborhood. We aren’t knocking homes down and replacing them with modern monstrosities! We are carefully and lovingly bringing the outsides up to a modern standard. Not CHANGING the entire face of the neighborhood – carefully improving it, one home at a time. Renewed homes stand out, but not “look at that, it doesn’t fit” stand out – more “look at that, I wish they were all that cute”.
And improving functionality within a home makes all the difference to modern day living. Families these days don’t want narrow doors that you have to walk sideways through, or low beams that the taller of us bang our heads on. We don’t want sunken living rooms that somebody is going to break a leg falling into, or fans that are so low we risk chopping our necks on them. The laundry doesn’t need to be in the way when you come in from the garage, it needs to be near the bedrooms so the kids can throw the dirty clothes in there. Older homes weren’t designed that way. People were smaller. Design still needed to evolve. More rooms was better than open concept.
New homes these days do provide all the functionality we need for modern living, as well as all the conveniences – pop-out sockets that you can’t see when not being used, built-in USB chargers for the tablets and phones, pot fillers so you don’t trip up with a pot full of water in the kitchen. So why can’t older homes be renovated in a way that delivers this?
The answer is, they can – we call it “renewal”. It takes time, effort, design and absolute attention to detail. It’s what we do. It’s such a pity that appraisers can’t step out of the box, just a little bit, and see how great that is for entire neighborhoods.