APPRAISAL QUESTION .... Another Appraisal Myth???

Not only will I come back here, I will also reblog this to some of our Canadian groups, to see what the appraisers on this side have to say.

I know landscaping adds a lot of value, but I'm not sure that by landscaping, we mean MANICURED... as in "keep the grass trimmed"???

I watched this show on tv where the foreclosed homes certainly dry up and this guy comes in and sprays the lawn green....it did look better...but would it increase 10-15%?  That's nonsense.

OK Carol... I rarely do this, but I am parking here to see what folks have to say on this one.

My reaction is No Way!  If only it was that easy!  LOL.

Carol, this is amazing it would increase the value that much. Man if this is true, then I'll go to the garden show today. I sure wish some appraisers would stop by and chime in.

That's nonsense, unless you're talking about installing significant amounts of landscaping - we're talking trees, flowerbeds, water features, etc. Simply mowing the lawn and trimming up is not going to add anything significant to the value.

LOL !!!!!    Talk about a sales pitch !!!!   Gotta love informercials and their "new twists" for modern society on an old line of work selling "snake oil cure-all" products.  Weren't they called "carpet baggers" in the 1800's and also referred to as "circus side-show carnies"?

Quote - "OK all you appraisers out there .... what's the skinny?  Do you tell your clients that if they mow the grass and plant some shrubs their property value will increase 10% - 15%?"  --  NO!

As you stated - a well kept yard (grass or desert) will have good curb appeal and attract more interest.  But will not increase property value by a specific percentage or amount.  Let me explain -

The market dictates value - not Sellers, not Realtors, not Appraisers, not Underwriters, not even Buyers, and certainly not any type of media.  AS always, real estate is local.  Market reaction to specific amenities, improvements, condition, location, etc. will determine how much contribution (increase or decrease) to the overall value of a property such items will contribute or subtract. 

The amount ($ or % if preferred) is calculated using paired analysis - simply put, by comparing several properties comparable to the subject, some with and some without a specific difference, where all other differences have verifiable adjustments, then the specific difference's contribution can be determined by the market's reaction to such difference.

A grass lawn (mowed or not) may reduce a property's value in some markets where it does not conform to the neighborhood (Q on Form 1004 - improvements) that consists of properties with desert (rock) landscaping - and visa versa.  Neighborhood with grass landscaping being predominant and a property with desert rock, or no landscaping done.  Same would apply to pools in a neighborhood with a community pool, verses a neighborhood without a community pool.

Now not being in sales, I would have to say that it may be possible for a buyer to say they will pay 10 to 15% more for a property in a predominant grass lawn neighborhood for a property with a more manucured lawn, over others without a well manucured lawn, but to view that incident as the norm, with a blanket across the board value difference, would be incorrect and misleading and could lead to litigation if determined otherwise. 

Can you imagine what will happen now?  We'll show houses that don't have 'manicured lawns' (or maybe the owner hasn't cut the grass this week), and the buyer will automatically tell us this house is worth 15% less? (All sellers should be getting their lawnmowers out just about now.) :)

Carol,
Hmmmm, don't think so but we all know a well kept and landscaped yard is important. 

Dave Hintz is right.  Appraisers will make adjustments for market reaction to market determinant factors - which vary from market to market and property type to property type.  I have never come across a situation here in New York where I was able to identify a finely manicured lawn as a market determinant factor.

Oh no... I think the highest adjustment I've ever given was $5k for a 500K +/- house.  That includes water features and prestine landscaping all the way around... and even with that, there were some comparable properties with similar landscaping and so there were no adjustments at all for them.  The increase in value?  Maybe $2,500 on the high end.  Even if the home owner just spent $30k on it.

Landscape is like paint, it may help a home sell quicker but historically hardly ever increases a homes value since people have different tastes in color and design as well as ambition to maintain what it looked like when purchased. Landscape has more value in use than in resale as landscape is quickly perishable; therefore, lenders are leary about making a 30 year loan on a home with a single value contribution that may not exist a few months after purchase, especially if it constitutes more than 3% of the estimated market value of the home. A $250,000 home with $15,000 in landscaping could be considered an over-improvement for its market area since it would immediately lose over 5% of its value if the landscape significantly changed and/or the average home in the neighborhood did not have similar landscape. Every home's value is directly tied to the surrounding homes within its neighborhood to a large extent so a significant single contribution above the neighborhoods norm would most likely significantly affect your wallet in the end. However; having said that, in todays declining market most homewoners will save money in the long run by having their home sell quicker with nice landscaping. Just my nickle of knowledge for the day.  

As an appraiser, I also just look at this from the perspective of substitution.   Curb appeal does a lot for sales.   Buyer's interest is better peaked with a manicured lawn....given.

But if you have a gorgeous home with a rough lawn, the question I would be posing, is how much would it cost to bring the lawn to pristine condition?   That is substitution.

In your scenario, if the home were valued at $250,000 - and the lawn was "average" - would it cost 10% ($25,000) to bring it to pristine condition?   No way!!   Maybe $2,000 for treatments, seeding, pest control etc!    So why would a potential buyer pay 10% MORE for a pristine lawn when they could accomplish the same thing for 0.08% ?

Carol - I would certainly challenge their claims.  Let us know the outcome if you do!

Carol,

Been appraising 25 years and I think I saw that infomercial when I was Channel-surfing but didn't pay much attention.  However, I just cut my lawn today so if you can send those appraisers over, I could use the extra value.

False Advertising of any kind is a hot topic for me right now.  It's incredible and appalling how some agents that are clueless when it comes to Short Sales boast of hundreds of transactions and high closing ratios - neither metric being supported by the MLS.