What you will know after this guide
- Compare like with like
- Calculate deferred costs
- Useful metrics
- Renovation value
Compare like with like
Use recent completed sales within a relevant area, then adjust for lot, legal living area, finished basement, garage, age, condition, street, noise, view and sale date. An active listing is not proof of value.
Calculate deferred costs
Create 0–2 year, 3–5 year and 6–10 year horizons for roof, windows, heating, water heater, drainage, foundation, panel, plumbing, kitchen, bathrooms and finishes. Add permits, professionals, demolition, tax, temporary housing and contingency.
Useful metrics
Use price per square foot only among truly similar buildings. Also compare total monthly cost: mortgage, taxes, energy, insurance, maintenance, condo fees, transportation and imminent work.
Renovation value
An expensive renovation does not automatically add its cost to value. Focus on quality, permits, coherence, durability and correction of hidden problems. Discount highly personalized choices you will remove.
Final decision
Set a maximum offer before bidding based on comparables, immediate costs and a risk allowance. Do not finance a major defect merely because the house looks attractive or competition is strong.
