The perception of beauty or value is subjective. What is captivating to some might be ordinary or unappealing to others. When buyers are searching for a property, they naturally ascribe value to certain aspects of the home – and that value can be completely different than someone else’s opinion.
Many times, we run into situations where additional space has been added or converted. Sometimes the space is permitted and on public record. Other times, there is absolutely no record of the work completed. How does a buyer compute the value of this space?
Consider these three examples:
A modest sized single-family home with a sizable detached recreation room added with permit, but the additional square feet are not on the public record. With the new ADU laws, this space today has a much higher value than it would have had just a couple of years ago.
A condo had a large balcony that was converted into additional living space. The work was not done with a permit and the space was not on public record. There was great upside potential to buyers, but they had to factor in the cost of the conversion. Since this was a condo, the HOA was a good place to start. Would they object to legalizing this space? Here the fear of the unknown cost and time needed for the conversion deterred many buyers.
A lovely home had an original covered patio that was converted to an indoor sunroom. The public records included the square footage, but there was no permit for the sunroom. Buyers wanting to do major renovations considered it a negative even though it was an integral part of the home.
What is a seller to do??? Although it may seem counter-intuitive, to a seller, disclosure is your friend. No matter the situation, tell what you know and let the buyers decide. You’ll often be surprised at the different reactions. The beauty is in the eye of the beholder and that means the buyers’ eyes.
