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

Somehow I managed to have an informercial on the television for a gadget called the Worx GT. It's supposed to be some sort of super duper, 100% everything you'll ever need lawn care tool.

But the part of the infomercial that caught my ear was the comment made by the 'everyday user' of this superb piece of ...... whatever.

Her comment?

"We have real estate appraisers that tell us that a finely manicured lawn will add 10% to 15% to the value of a home."

Now I know ... nice lawns and landscaping certainly enhance curb appeal. That's a given. And that curb appeal can certainly translate into an increased level of interest in a property. But I'm not so sure I agree that it will add 10-15% in value during an appraisal.

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%?

Initial appraisal: $250,000

Appraisal after using Worx GT: $275,000 (minimum)

If this were true do you think there would be a garden center ANYwhere that would have one single little seed left in it?

Concept Builders, Inc.

Carol Smith, Sales Associate

Shamrock Valley

1913 Guinness Drive

Graham, NC 27253

Office: 336-228-7975

Cell: 919-418-6549

csmith@conceptbuilders.net

Posted by Carol Smith on 05/09/2009 06:23 PM

Comments (20)

appraisals, real estate appraisal, infomercials, how to add value to a property

Originally posted at: Full Disclosure: APPRAISAL QUESTION .... Another Appraisal Myth???

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20 Comments on APPRAISAL QUESTION .... Another Appraisal Myth???

MAY

Kate, I'll have to come back and check what the appraisers say....I'm highly doubtful it would add THAT much value (but it DOES sound like a good way to sell a product :)

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.

MAY

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.

Carole - I agree that landscaping makes a home more appealing on first look. I just have trouble with the suggestion (aka false advertising) that if someone buys their product they will make more money when they sell their house.

Sylvie - Thanks! I'd really like to hear from the appraisers. Maybe I'm wrong. And if I am .. I'd like to know that too.

Sally - I saw that too. And that show didn't bother me because they weren't stating that you would "add 10% to 15% in value" while the guy was spray painting the ground.

Steve - Nothing is ever that easy. If it were ... well, I'd be at the local garden center with a large truck. I have 4 homes (MY homes) on the market that aren't selling. If I thought that buying their product would make them sell and for an additional 10% .... you can bet your whatever I'd be in on that deal.

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.

Missy - I'm not convinced that it would increase the value enough to make a difference at the closing table. Hold off on that trip to the garden show. Happy Mother's Day!

Tim - I could understand how adding a water feature, custom designed stone walls, etc. would add value, but not by using a weed whacking machine to edge your grass. But even then I'm concerned with the 10% - 15% range quoted. That can add up to some serious bucks ... and lots of folks aren't going to want to pay $20K or more for a place because it has a water fountain and some nice Japanese Maple trees.

MAY

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.

David - thank you for that explanation.

I knew in my heart it was hogwash, but rather than address a field I don't practice in I thought I would put it out there for an 'expert' interpretation.

When I heard that informercial I wanted to climb thru the TV and smack that woman. My first thought was ... "How dumb can one person be?!" .... Then I thought again ..... people get fleeced everyday by smooth talkers like this woman.

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.) :)

MAY

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.

MAY

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.

MAY

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% ?

Sylvie - I heard that the number of ozone days has increased markedly since these commercials began running. LOL No wonder the price of gas went up - there's a rush at the stations to fill up those mower gas cans.

Cynthia - I totally agree that a maintained lawn is important and that it does create a visual interest from the curb. I don't agree with the infomercial that it adds 15% to the value. :)

Jesse - Thank you! Exactly what I was thinking.

Sara, Ed, and Richard - Thank you for weighing in on this from the appraiser side of the board. I have to say my question in the post was more rhetorical than anything else, but now I'm wondering ... If I wrote to the promoters of that product and asked them for the names of the appraisers that gave them that advice could they provide them? Somehow I don't think my inquiry would get answered.

MAY

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

JUN

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.

JUN

Sara - I don't know the outcome, but I know I wouldn't trust someone that publicly proclaims such an outrageous claim!

Richard - No problem! I'll get right on that for ya! LOL

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