#EWR FAQ Corner: Comparative Market Analysis
Hello, this is broker Will Puente with another question from one of my clients, and this time it has to do with a pool. I had a lady called me and asked: should I put a pool in my home? What is your opinion?
I asked her: Do your neighbors have pools? She stated that maybe 2 neighbors out of 20 homes have a pool. I let her know that she would join those 2 neighbors, however, those neighbors may not get value out of that pool.
The value you get from a pool has to do with the amount of fun time and that’s something you should definitely consider because it’s your home. But, in a dollar sense, those 2 neighbors are not getting as much as if there were, for example, 10 neighbors in an area of 20.
This really is all about Comparable Market Analysis: it goes back to apples to apples. Ask yourself, does your neighborhood call for a pool? If it doesn’t call for a pool, maybe a better idea would be to look for a neighborhood that already has a whole bunch of pools, maybe 1 out of every 3, at least.
That way, when you put that investment into a pool, it does increase your value. But if you’re 3 out of 20, it may not. And that again goes to the appraiser, who gives you a value. It’s an opinion, and they might say something like "they’re the only ones with a pool, I don’t think that that dollar should go towards completely." They may give you a little bit, such as 10 cents of every dollar, or maybe 50 cents of every dollar of that pool’s cost. The best bet is to go to an area that has pools. With that said, if you’re the only house in the neighborhood that doesn’t have a pool, you may take a hint.
So understand: Comparable Market Analysis. You need to be about the same as your neighbor because that absolutely helps your value. If you have any questions, let me know.
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