Any homeowner knows that a solidly built deck can add serious value to your home. But just how does the property appraisers determine how much a deck adds to a home? This is an important question for homeowners because property appraisals can affect your taxes, whether you qualify for a refinance and how much your home sales for.
Let’s take a look at how a property appraiser determines your deck value.
Decks Offer a High Return
Before the property appraiser takes a look at your home you’ll already have a good idea of how much the deck adds to the overall value if you built it or are in the process of building a deck in Austin. Decks usually have close to a dollar-for-dollar return on the investment – around 80% give or take a few percentage points. It’s one of the best home improvements you can make to drive up your home’s worth.
With that in mind you should be able to ballpark about what the appraiser will determine. If the number is way off from the construction cost you may want to ask what methods were used to determine the value of the deck.
Property Appraising 101
Texas property appraisals are done to determine the market value of a home and the land it’s on. What is market value? It’s an estimate of how much your home would sell for in the current real estate market.
Appraisers must use accepted methods that are used on all properties to come up with the market value. However, they have to look at each home individually. There are three methods that an appraiser in Texas may use:
Cost Method – This approach looks at the appraisal from the angle of what it would cost to replace the property based on current rates. It takes into account both the cost of the land and then the cost per square foot for the improvements on the land.
Income Method – Market value is determined by examining comparable rental data and/or the earning potential to reach a gross income potential. This income potential is used to determine value.
Market Data Comparison Method – The appraiser will find homes in the neighborhood that have recently sold. From those they will choose three or so homes that are closest to the property being appraised and compare them using certain criteria.
Appraisal Factors That Matter for a Deck
Appraisers look at a list of criteria, including decks/porches, to decide the overall value of a property. There are a few things that appraisers look for when it comes to determining how much value a deck adds to a home.
Size – The square footage of a deck can be a factor when determining value by comparing properties.
Enclosure – If a deck or porch is screened in or otherwise enclosed that can have a bearing on the value.
Construction – You may remember in the Cost Method appraisers analyzed what it would cost to replace existing structures. The materials used will influence this measurement.
How Other Homes Affect the Property Value
As mentioned above, in Texas an appraiser may use other homes in the neighborhood as a barometer for valuing your property – including how much value the deck adds. If none of the homes in your neighborhood have a deck then yours may not affect the appraisal. However, if everyone has a deck and you don’t it can mean your market value is a little less in comparison.
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Original Source: http://timbertownaustin.com/real-estate/how-deck-value-is-calculated-for-property-appraisals
