I just got comparable sales for a house with an in-ground pool. The home is a split entry home with two bedrooms on the upper level and two bedrooms in the basement. This is what the appraiser will want to prove.
First, what are the sales in the immediate market area? Are there homes with similar design and appeal, square footage, and bedroom counts? What about houses with pools as a theme?
The first round of comparable sales will be selected to support the immediate area. The appraiser will obtain comparable sales that match square footage, layout and appeal, and number of bedrooms with lot size in mind. If the appraiser can find a home in the area that has been sold within a year and offers similar square footage with similar amenities, then great, the appraiser will use this as a comparable fourth sale to back the in-ground pool. This will provide support for both the home type itself and the in-ground pool.
If there are no sales in the immediate area with similar services, the appraiser will look outside of the immediate area. Your goal will be to find the same characteristics with homes that offer a general age and quality level similar to the topic. If the appraiser feels that the sale with an in-ground pool is not similar to that of the house, he will not use it. Better to use a home with a similar layout and square footage with the same amenities.
If there are no sales with groups, the market area will expand until one is found to support the group. So which is more important, the inground pool or the location? In most cases, the location will prevail over the in-ground pool. If a group is outside the market area, it must have some other similarities to be truly comparable to the topic. For example, if your theme is a split entry home offering two bedrooms, a two-bedroom home or a two-bedroom home may be acceptable.
If the market is considered stable and there is not much activity, an older sale with an inground pool will be accepted. If the market is really fluctuating, this may not be the case. It will only depend on each comparable sale.
In this case, I used two sales to support the immediate market area. It is important to support the split entry design. I used two sales to support the design and appeal. Even if they are outside the immediate area, they at least offer houses of similar appeal, which is important in most cases. I considered two sales and used one to support the inground pool. In this case, they offered a different layout, but the same bedroom count.
Turns out, the inground pool added some value to the item (around $ 12,000). But here’s the catch.
The pool installation cost $ 20,000 or more, surely the owner has not yet charged the full value of the pool cost, so if you can install the pool and use it over the years it may be worth it, but never, never install an in-ground pool and think it will increase the value of your home.
Turns out this house was going FHA. There is a big mistake about safety and underground swimming pools. I spoke to two government HUD employees about the inground pool. One in California and one in Alaska. I repeat, they do not require the pool to be fenced in or covered with a security cover if it is not required by your local area (county city).
The only requirements they have is that the pool be filled with water and in good working order. Both HUD government employees told me that if they are approved by the city or county, they will pass the FHA requirements. If the appraiser believes that the in-ground pool is a safety hazard (children and adults drown in the pool), the lender may reject the appraisal condition and finance the loan, unless the city requires the pool to be fenced.
