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How Much Value Will a Pool Give My Home?

Mar 03, 2021

The Pool Question

How much value will a pool give my home?  A short specific question with a complicated and non-specific answer: “It depends…”

The “It depends” answer is not much help to real estate agents, homeowners, or investors.  Maybe understanding how the appraiser thinks through the pool valuation process will help you with your pool dilemma.

To begin to “think like an appraiser” it is important to understand and remember that appraisers do not use preset numbers when determining the value of any improvement.  Appraisers determine value by researching comparable property sales.  The comparable sales determine the value of a home and all improvements. Comparable sales are the evidence appraiser use to support the market value that is determined.  

When the appraiser is appraising a home with a pool the appraiser must find comparable sales of homes with similar size, quality, and condition that have a pool.  If there are homes with similar size, quality, and condition with pools and without pools in the same neighborhood then the valuation task is easy.  The appraiser compares the sales price of the homes with pools to homes without pools.  If there is a difference in sales price, then the difference becomes the added value or the decrease in value.

Example #1

Comparable Sale #1 with Pool

Size - 2,540 SF

Home Quality and Condition Rating – Above Average

Pool Quality and Condition Rating – Above Average

Sold Price -$350,000

 

Comparable Sale #2 without Pool

Size – 2,620 SF

Home Quality and Condition Rating – Above Average

Sold Price - $335,000

 

In this example a pool would add around $15,000 to a home in this neighborhood.

 

Example #2

Comparable Sale #1

Home Size – 2,876 SF

Home Quality and Condition Rating – Average

Pool Quality and Condition Rating – Average

Sold Price - $372,000

 

Comparable Sale #2

Home Size - 2,780 SF

Home Quality and Condition Rating – Average

Sold Price - $385,000

 

In this example even though the house with the pool is larger it sold for less than the smaller home. The pool decreased the value of the home by $13,000.

 

Example #3

In this example there are no comparable sales with a pool in the neighborhood or even within a mile radius. Then the appraiser must expand the search to find a comparable sale meaning the appraiser has to find a home in similar neighborhood with a similar size, quality and condition that has a pool. The comparable sales used need to be in the closest most similar neighborhood.

After locating the neighborhood with comparable sales, the appraiser would look at the comparable sales just like the first two examples to determine the added value or decrease in value.

Remember, the appraiser must find comparable sales somewhere to be able to determine market value.  You can begin to “think like an appraiser” by researching comparable sales.

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