http://www.denhamspringsappraisers.com/ – Denham Springs Home Appraisal Services: Why Did Buyers Give No Value To Nice Brick Gameroom? I came across this sale last week and thought it would shed some light on how “the Market” or “home buyers” view these types of detached amenities. The red arrow below shows this extra 20 x 20 brick Gameroom on concrete slab with electricity and really nice.
The sales price of this 5 year old 2625sf home, with lake view and on larger lot, was between $240,000 to $250,000 in late 2010 or $93/sf. At this sales price for these features, it doesn’t appear the 20×20 Gameroom below was given much of any contributory value. And, the sellers paid the buyers $8,000 to buy their home or paid $8,000 in seller paid concessions. This fact alone shows there was no contributory value for this Gameroom.
Why did the market not pay contributory value for such a nice building? I’m not exactly sure but after 20 years of appraising homes, it’s been my experience that the market rarely rewards dollar-for-dollar for such amenities. Quite often, the market pays about 25% of original cost for such detached Gamerooms, Workshops, Inground Pool and Wood Decks. My advice is if you’re going to live in your home forever, then build what you want in the backyard and enjoy it. However, if you plan on moving within 5 to 10 years, then I don’t advise making such investments that won’t bring at least the full amount of your investment in return.
Author: Bill Cobb, Appraiser with Accurate Valuations Group