how much value *approximately* does an inground pool add?

[ship of fools]

Re: how much value *approximately* does an inground pool ad

I was an appraiser for many years and can answer your question.

The correct way to determine the value is to find similar houses with and without pools that have sold in your area and the difference in sale price gives you the value of the pool. So in an ideal world you have two identical homes except one has a pool and sells for $250K and the one without sells for $240K so in that case the pool added $10K.

In the real world it isn't always possible to find two similar sales so it becomes a case where it is subjective based on the appraisers opinion.

I would give $2,500 in value to an older, existing pool and up to $10K or so for a gorgeous, custom pool.

There is no way an appraiser would take a $250,000 house that added a $50,000 pool and value it at $300K because there is no evidence in the market (comparable closed sales) to support that value.

 

[bzeller]

Re: how much value *approximately* does an inground pool ad

First, I don't know what OK law is, but in TX you can only get a home equity loan up to 80% LTV. Therefore, if its similar, you won't be getting a home equity loan. I ran into this issue when financing our pool as I was at like 79% LTV. We ended up with a home improvement loan. This kind of loan typically allows you to finance up to 90 - 95% LTV and the bank often adds 50% of the loan to the current appraised value. Rates aren't quite as good as mortgage rates, but we're spoiled right now with sub-4% rates. I was pretty happy with 5.75% on our home improvement loan.

Finally, I don't know what $40K gets you in OK, but here it would be a pretty small, very basic pool with little to no decking. Nothing wrong with that, its just that my wife went in with similar expectations, but for a grand pool with all kinds of features and 900 soft of decking. Needless to say, she was surprised when the first quote came back north of $70K!

 

[chem geek]

Re: how much value *approximately* does an inground pool ad

The correct way to determine the value is to find similar houses with and without pools that have sold in your area and the difference in sale price gives you the value of the pool. So in an ideal world you have two identical homes except one has a pool and sells for $250K and the one without sells for $240K so in that case the pool added $10K.

I agree and looked at dozens of sales in our extended neighborhood (several hundred homes) over an extended period of time, but adjusting for median market value for homes in the area for that time and some basic home size adjustments (I'm not sure why appraisers don't generally do the time adjustment -- it gives one many more comps to look at and it's easy to adjust for pricing movements over time as such stats are available monthly and can be moving averaged -- I think it's far more important to look at homes in the same neighborhood over a longer time than to go to other neighborhoods at the same period of time). Homes with pools were around $50K higher than those without, but that is on a much higher home price of around $900K, so roughly 5-6%. Also, in our area construction costs are high where a middle-of-the-road in-ground pool is roughly $75,000, a very basic in-ground is $40,000 and a custom high-end is $120,000+.

Our "middle-of-the-road" pool and hardscape is shown here. Rectangular 16'x32' with hand-trowled concrete hardscape plus solar system for heating (in addition to gas heater) and automatic electric safety cover. I'd expect the same pool in an area with a lot of pools and competition such as Florida to cost half and even lower for areas of the country where home prices are substantially lower.

 

[BangBang]

Re: how much value *approximately* does an inground pool ad

I dont think its just the pool as far as appraisal. I think in most cases, if you put an IG pool in you are also doing some very elaborate and elegant patio work. Adding hard scape does add appraisal value. So creating a nice relaxation area which includes the pool would raise appraisal IMO.

I think that is the key. We just got financing for our IG pool that is to be built in 2wks. In talking to the bank we did not have quit enough equity built up to finance the pool through an equity loan (only been in the house for 1.5 yrs). However, after the pool is in and the landscaping (the key is the surrounding landscaping) is complete, I will be able to refinance my loans and roll them together into one payment. With lower interest rates and shopping around, we have found that our monthly payment won't really change much....the downside is that I might be indirectly paying for my pool for 30yrs

 

[techguy]

Re: how much value *approximately* does an inground pool ad

If you refinanced into a single loan, you refinanced your pool (and home) as a 30 year loan. It sounds like you also re-financed the 27-28 year loan (term left on original loan) you had for the house into a 30 year...

 

[BangBang]

Re: how much value *approximately* does an inground pool ad

If you refinanced into a single loan, you refinanced your pool (and home) as a 30 year loan. It sounds like you also re-financed the 27-28 year loan (term left on original loan) you had for the house into a 30 year...

Right...I meant to say for the remainder of the loan. I would like to move everything to a 15 year loan when we refinance any way.

 

[techguy]

Re: how much value *approximately* does an inground pool ad

I just did a refinance and moved from my 30 year (that I had 23 years left on) into a 15 year and it changed my monthly payment up $50 a month to do so. Pretty good deal in my mind.

 

[ship of fools]

Re: how much value *approximately* does an inground pool ad

[quote="ship of fools":38t4923q]
(I'm not sure why appraisers don't generally do the time adjustment -- it gives one many more comps to look at and it's easy to adjust for pricing movements over time as such stats are available monthly and can be moving averaged -- I think it's far more important to look at homes in the same neighborhood over a longer time than to go to other neighborhoods at the same period of time)

[/quote:38t4923q]


Because the underwriters require three comparable sales that are less than one year old and ideally less than six months old. Comps between six and twelve months old are acceptable but need to be explained. The reason is recent sales are more indicative of current market value and conditions which is what they are interested in. There is no doubt on unique properties and areas with limited sales that sales of similar or more local homes may be a better indication of the true value but when you adjust for time you add another variable. You need to be able to support the time adjustment just like the adjustment for the pool or a screened porch, bigger basement, more square footage, condition, lot size etc.

In our current economy many areas are experiencing flat home values so no adjustment is made.

Remember a bank appraisal is telling the bank what they could expect to get for the property in the current market within a reasonable period of time..... not necessarily what the homeowner could get if they find the ideal buyer. If someone was looking at $300K homes and planned to put in $75K in improvements for a pool and landscaping they may very well spend $350 on a home right next to the identical home without the pool . If it happens once it's a fluke and the appraiser needs to overlook it because he doesn't have support but it doesn't mean the next guy selling his house can't ask $375

It's been a long time .... now i figure out telephone stuff

 

[AimeeH]

Re: how much value *approximately* does an inground pool ad

Interesting thread so I'll add my 2 cents. I'm married to an appraiser. He will tell you that whether a pool adds value "just depends." We are in SC and this varies by location. When a good appraiser assesses a home it is his job to find "comparable" recent sales in the area to compare it to......so a thorough appraisal should be comparing apples to apples (ie other homes with pools). Next....then a comparison in quality might be made to increase or decrease quality of decking and or outdoor kitchen etc.

With that being said we invested in a new inground build in 2011 and LOTS of concrete decking (since we are on 26 acres and had no real patio and set the pool a bit away from house). We didn't expect a return on our investment with increased value and sure enough we were right to set our expectations low. We bought home 4/2004 and refinanced in 12/2011 after putting in pool ( low interest rates prompted us to go to 15 year mortgage) and house appraised for what our purchase price was in 2004.

As this thread tells the story my husband is right......." It just depends." And it depends on sooooo many things....location,climate,economy etc.

 

[chem geek]

Re: how much value *approximately* does an inground pool ad

Because the underwriters require three comparable sales that are less than one year old and ideally less than six months old. Comps between six and twelve months old are acceptable but need to be explained. The reason is recent sales are more indicative of current market value and conditions which is what they are interested in. There is no doubt on unique properties and areas with limited sales that sales of similar or more local homes may be a better indication of the true value but when you adjust for time you add another variable. You need to be able to support the time adjustment just like the adjustment for the pool or a screened porch, bigger basement, more square footage, condition, lot size etc.
:

Thanks for the explanation. I understand that it's the rules that are used -- I just don't get how an adjustment using actual median home sale prices (which automatically factors in all market conditions) can be considered less valid than an adjustment for going to a different area. I would take the hard statistics of actual home sale prices (over a sufficiently large statistically valid sample size) over the squishy adjustments for the quality/desirability of a neighborhood. Remember that I'm talking about using those historical prices as a factor relative to current prices to create equivalent current market sales prices.

That fourth appraisal on our house was ridiculously low at around 73% of reasonably appraised value. The appraiser said we had no swimming pool, even though he had walked around it! The appraiser gave a Q4 for quality of construction and a C3 for condition for our home and ALL comps and gave an effective age of 25 years for our home even though it was rebuilt down to the studs (i.e. all new walls, new roofing, new plumbing, new electrical, new appliances, bathrooms, flooring, etc. plus 1000 square feet added) only 9 years earlier! The appraiser used NO comps in the same neighborhood in spite of there being 3 of them in the previous 6 months plus 2 more within 12 months! The comps used were around 1 mile away in completely different neighborhoods, some with much differing character (higher density, smaller lots, lack of views, etc.) and all but one were not really comparable at all and not properly adjusted. I could go on, but I'm just getting myself worked up about it all over again. I complained to the Office of Real Estate Appraisers, but they have still not gotten around to it (they said it takes around 6 months with their backlog).

The thing is that I since did a spreadsheet of all the home sales in our greater area (33 homes over 3 years) and used statistical methods to correlate the major factors such as lot size, house square footage, view, road noise (for homes next to a road that has trucks from a quarry), number of bedrooms and bathrooms, pool, solar, updated/outdated exterior/interior (home sales generally had historical exterior and interior photos), etc. and found that certain items correlated very well. After the most dominant adjustments, I got appraised values that were in a +/- 10% range for most of the homes and I wasn't doing any fudge factors. Sorry for the digression. Obviously, I'm still not over this.

 

[techguy]

Re: how much value *approximately* does an inground pool ad

Honestly,in my case, I was so happy that my appraisal came in sooo much higher than I had expected, I could not care less about the pool or comps. It was a re-finance and I was not going to see any that money until I was selling.

A house is only worth what someone else is willing to pay you for it, when you are willing to sell it.

 

[BangBang]

Re: how much value *approximately* does an inground pool ad

As if to drive home the point of pool\home value being subjective....I was talking to my sister and her husband last night. They are currently home shopping and have looked at a lot of homes for sale. They looked at a house with an above ground pool in the back yard. They really liked the house, but didn't want to have to deal with "tearing down" the AGP! I said hold on a second! My IGP build is scheduled to start this week or next at the latest, and I'm paying a guy a ton of money to dig up my yard and put in a pool. They said they don't want the maintenance headache and it's not worth giving up back yard space for a pool. He doesn't swim and my sister could take it or leave it, so to them, the pool was a big downer for a house they otherwise really liked.

There is just no accounting for taste!

 

[Theep]

Re: how much value *approximately* does an inground pool ad

In Tucson, AZ, my realator said that you get 50% for a pool. This was in reference to 350-400K homes. Higher end homes, 1 mil, are expected to have a pool and not having one is a major turnoff.