Be aware of market values

Debby Braun of Keller Williams Realty First Atlanta has been selling real estate for more than seven years.

Q. What’s gone wrong? My house doesn’t appraise now for what it did just a few years ago.

A. Several years ago, when the market was much stronger, I helped someone sell a home that had appraised two years earlier at $243,000. The homeowner had refinanced and used that money to improve her home. But when it came time to sell, the most we could get for it was $225,000, which was $10,000 more than any other home in the subdivision, but certainly well below that earlier appraisal. It was tough helping the seller understand that the value of her home was less than she had expected.

Why does this happen?

It seems to me that those appraisals of a few years ago were extraordinarily generous. And then when the market was booming, a lot of people took advantage of the rise in house values to refinance their home to pay for renovations or to use the cash for other purposes. Now they’re ready to sell that home, and even with the renovations the homeowner did, the house may not be appraising at even the price it was pre-renovation, let alone reflect the cost of the work done to the house.

Is this true everywhere?

Although there are many parts of metro Atlanta where homes have held and increased their value, it’s possible that a homeowner has over-improved their house for the subdivision, or that foreclosures have lowered the value of the surrounding homes. Always when you’re planning renovations and of course when you’re ready to sell your home, be aware of market values in your neighborhood and surrounding areas.

C.W. Cameron For the AJC