Every neighborhood has it's own pocket areas and in Chicago we have 77 neighborhoods with even more neighborhoods identified under just one name. Ravenswood, Bowmanville, North Center under it's umbrella name of Lincoln Square. And even those communities have pocket areas. Have a similar median value is one of the strongest indicators for the definition of pocket area.
How one figures out there home value can be done through a CMA "Comparative Market Analysis" but I find that very few agents understand what to compare to with the subject property.
For instance, if you have a bungalow and it has an octangular bay in the front and your property has a octangular bay in the front .. then that's what you need to compare your property to.
When I was appraising, I got nailed once by an underwriter who told me that if you have a yellow bungalow or a yellow brick building .. you need to compare it to similar as that color, for some reason, according to this underwriter, doesn't have a higher selling price. (Don't go yelling at me .. this is the underwriter that reviews a ton of appraisals and sees the sales coming in).
Let's say that you have new replacement windows in your home but that roughly 35% of your neighbors have new windows. It generally will only increase your marketability more then the value. Yet, marketability generally means a shorter selling period and hence, you wouldn't be on the market as long as those who haven't replaced their windows. So, while you might not get the return that you want from the new windows like you want to if you were in such a percentile, you also wouldn't have that additional carrying cost ... hence, you might be doing yourself a huge favor and making a better net selling price as a result of having a shorter marketing period.
Compare apples to apples. Not what most would think I would say what it generally is considered to be (comparing the same style house to the same style house) but something that most miss: Zoning. I had a listing that was B-3 Zoning and the neighbors had R-3 zoning. Huge difference in selling a same styled house when the zoning is different. Get to now the zoning of the comparable properties.
There is a difference between updated, remodeled, rehabbed and reconstruction. You are going to have a variance in selling price because of these four words. Basic way is to put the property address down and write what was updated: Kitchen, appliances, bathroom fixtures?
What was remodeled: New Kitchen, new closet doors, refinished hardwood floors, painted, updated bathrooms, new tile work.
What was rehabbed: Two different rehabs: Rehab where some of the plaster was removed or added, a porch converted into a family room, second floor finished and/or basement finished.
Then there is the total gut rehab: That takes roughly 15 - 20 dumpsters, where all the lath and plaster are removed, the hardwood floors or chipboard are removed, the interior is gutted all the way down to the walls. You put in all new copper plumbing, electrical, subflooring, sister against the outside walls where they are weak or replace as needed, add new floor joists to replace the old 2 x 6 floor joists, and put in all new flooring, drywall, insulation ... well, a complete new home.
Reconstruction: Reconstruction is similar to new construction except that you retain the old foundation, repair that foundation, take the walls down because they are in disrepair and the highest and best building would be to replace the entire outside walls along with a whole new interior including the rafters and roof.
To be continued ....
This information is provided to you by Barb Van Stensel with a commitment to support the Chicago, IL community.
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