shmenguin wrote:the appraiser looked at our plans, came over to inspect the house and concluded that all of this work added a whopping $30,000 onto the value of our house. that's patently absurd. that wasn't even half of the cost of getting the work done. attached to her report were real estate listings from around the neighborhood of "comparable" houses that had no evidence of being the same quality as ours, but they were the same sq ft and had the same number of bedrooms. so basically, those houses determined the value of our upgraded house. we had to cancel everything because of the appraisal, which cost us a couple grand in paying an architect that we never used. not to mention the headache.
Actually, for the work you describe $30k in added value didn't sound out of line to me.
In the Mid-Atlantic region, a kitchen remodel returns about 62% on investment, great/family rooms tend to add about 55% the cost of the reno. So for you to have been trending with your market, your budget would have been ~$47,000, give or take, if the reno work was going to add $30,000 in value.
But you said that the appraised new value wasn't even half your reno budget. So if the appraisal was accurate, that means he thought you were renovating your house out of scale to your market. Let's say your budget was $70,000; normally your return on that would be ~$41,000 or so. That $11k difference between expected and appraised could be the fact that your improvements were not in line with the local market. In other words, a $41k increase in your home's value might make it significantly out of scale with other similar houses in your area. (I don't know your area, but adding that kind of value to a house is a pretty big chunk in normal-people real estate.) So the appraisal has to temper the local market with what you're doing, and so you end up with a post-renovation appraised value that's significantly less than expected.
I could easily spend $75,000 on a kitchen reno, had I the money.... shoot, I could spend double that in appliances and tools alone. But it would skew the value of our house so badly that we'd only probably see a sub-50% return.
Now, that's only really an issue if you don't expect to be in the house for more than a few years. But if you plan on being there for five-plus, and the renos are real quality-of-life things for you and your family, then it makes sense to go ahead (if you can) with those kinds of improvements. But if you realistically don't think you'll be in that house past five years, pare things down to maximize your return.