How Much is That Home Upgrade Worth?
The ability to accurately price a property for sale is arguably a listing agent’s most valued skill. For that, REALTORS® rely on their local know-how and experience. As well as a host of tools and software, including RPR’s flexible CMA tool and RPR Seller’s Reports. But when it comes to making tweaks and adjustments, how can you refine value based on upgrades made or repairs that need to be made? RPR’s Refine Value Tool is the perfect solution.
The RPR Refine Value Tool and Today’s Market
Today’s market is beyond hot, coupled with a severe lack of inventory. While many sellers are still making upgrades and repairs for even more ROI, others know that homes are going above asking and that selling “as is” won’t necessarily affect their marketability.
Another tricky part of the equation is that during the height and onset of the pandemic, many people put money into projects (mostly exterior) and remodels (mostly kitchens), because they knew they’d be spending a lot of time at home! This made their already valuable homes even more desirable. As such, homeowners are sitting on gold mines and being pushed off the fence and into this heated seller’s market.
How can you accurately price a property with these factors in mind? RPR’s Refine Value tool allows REALTORS® to determine the value of a home based on property characteristics, home improvements made (or not), and market conditions. Here’s how it works:
Refine Value: Adjust Basic Facts
Sometimes public records are out of date and don’t reflect the correct number of bedrooms or bathrooms. You can easily update public record basic facts to refine the value.
- If a field is empty or shows a value of zero, entering data will not change the value because there is no baseline available to refine.
- Sometimes changing a basic fact will decrease the value. For instance, adding a bedroom without increasing the sq footage may be seen as a negative by the system, in turn decreasing the estimated value.
Refine Value: Home Improvements
Whether it’s a simple “fix” like a new automatic garage door opener, or a major kitchen remodel, it’s great to be able to show sellers what they can get back for their investment. Home improvement values are calculated by project and region and are amortized. Choose from a list of improvements or add your own custom home improvement. This data is provided by Zonda and is updated annually.
- Click on the downward arrow to open the first drop-down menu. Select an improvement from the list or click Other to add your own custom improvement. If you selected Other, enter a description in the box that appears.
- Click the downward arrows in the 2nd and 3rd drop-down menus to select a month and year that the home improvement was completed.
- Select the downward arrow in the last drop-down menu and enter the cost of the home improvement.
Refine Value: Needed Improvements
On the flip side of makeovers and rennos, is repairs and improvements. With sellers currently in the driver’s seat, many of these common fixes, such as replacing a roof or new flooring, are not getting done. And although that may not impact the final closing price, you still need to know how to bake it into your valuation. To decrease the estimated value and identify an issue with the property:
- Enter a needed improvement in the 1st field.
- Next, enter your own estimated cost to complete the improvement in the 2nd field. Click the Add button when finished.
- The total cost that you entered will be deducted from the estimated value.
Refine Value: Market and Home Conditions
The temperature of the current market and the current condition of a property can certainly impact the price. RPR makes it easy to adjust for both with slider controls. Simply move the sliders to change the estimated value based on the local market and the condition of the subject property.
Finely tuned valuations
RPR’s property pricing techniques, including the Refine Value tool, should be a part of every REALTOR’S® tool kit. The ability to adjust and fine tune property pricing is key to presenting a winning listing presentation and proving your value to clients. Start refining home values with RPR today!
To try it out or get started, visit narrpr.com.
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TUTORIALS & GUIDES
Home upgrade helps you in many ways, and gives you attraction, and if you are planning to sell your house then always recommended to renovate your house.
The problem many agents encounter is that they are real estate brokers, not contractors. With material costs increasing at inconstant rates it is difficult for an agent to keep updated on the cost of improvements and maintenance. It would be great to have a regional index.
There is one it’s called Cost vs Value report. It comes out annually.
Agree with your comment Sarah. Ever changing supply costs, overall lack of product availability and scant availability of contractors makes for a constant changing valuation. Contractors are in great demand and up charging for services accordingly. Once we return to a more balanced market this tool may be more useful.
Yes!!! This is exactly right. Much needed.
I agree with the comment above that it would be helpful to have regional indexes for improvement values.
Refine tool isn’t helpful. Example: adding a bathroom to $250k home increases value by $80k. This is the case regularly for me and other agents I know if I’m missing something I don’t know what else it would be. Instruction or fix appreciated. Thank you
I agree with those of you who feel this tool is not helpful. Realtors should not be contractors unless they are licensed. And the Cost vs. Value regional tool isn’t all that accurate, either. The closet major city listed to me is 2 hours away and the pricing is very different there from where I live.
I used to Refine Value Tool to adjust basic facts. The property showed 1 bathroom and it actually has 2. It added over $102,000 to the value. When I added an extra 400 sq ft, it added an additional $85,000 to the value, nearly doubling the value of the property. I don’t think this is a reliable tool.