The value of real estate is often determined by its potential. (Photo: Pexels).
The value of real estate is often determined by its potential. When a seller places a property on the market, they often have not done any research as to what the best use of the property might be. Knowing exactly what can be done with a property in the future will often bring added value in the sale.
Vacant land
The seller of vacant land might know the size of their lot, but they may not know the potential of what can be built on it. When an owner decides to sell, if the owner and Realtor can anticipate the questions a buyer might ask and have answers to them on hand, the sale will likely go more quickly and sell for a higher amount.
Existing home remodel
Many of our cities are built out, or close to it. The housing stock in Boulder County is aging. Due to those facts, many buyers are looking for homes that can be rehabbed, expanded, or demolished and built anew.
Our municipalities have a variety of land use and site planning rules that apply to residential construction and expansion. Many of those rules can be fairly complicated and require a permitting process. For example, rules like calculating the angle of a home so that it doesn’t block the solar access of a neighbor. Also, the lot size will dictate the size of home that can be built on it. The zoning regulations might allow a second unit if the lot is big enough. You get the idea!
As a seller, you would be well served to request a professional architect’s vision study. As an example, you could sell a vacant lot for quite a bit more if you had confidence that two units could be built instead of one. Or, if you had a ranch style home, you could probably sell it for a higher price had you confirmed that a second story could be built on the home.
There might be county, city, AND Homeowner Association (HOA) rules that could dictate what you can do with the property.
Accessory Dwelling Unit (ADU) possible?
A legal ADU can provide a source of additional income for an owner who would like to rent out part of their property. Municipalities have a variety of permitting rules and guidelines to follow for the construction of such a unit. Characteristics of the existing property will determine if an ADU would be approved and what size it might be.
Minimum and maximum square footage for a house, floor area ratios
Most cities and counties have limits on the size of the home that can be built, or the maximum size of improvements that can be made. Often the size of the home is limited by the size of the lot or zoning restrictions. The larger the square footage of the home that can be built, the more the value increases accordingly.
Your professional team including a Realtor®, appraiser, and architect can help you make informed decisions about your property. Contact an architect for an estimate to conduct a vision study.
By Duane Duggan. Duane has been a Realtor for RE/MAX of Boulder since 1982. Living the life of a Realtor and being immersed in real estate led to the inception of his book, Realtor for Life. For questions, e-mail DuaneDuggan@boulderco.com, call 303.441.5611 or visit BoulderPropertyNetwork.com.