What do these three things have in common- baseboard heaters, non-conforming heat sources and losing money?

One of the most difficult factors in any market is trying to determine the impact of a non-conforming heat sources and whether or not this affects the value. Let me give you an example. I just appraised a home the other day. The home is a ranch style home with a basement. The heat source is baseboard heat. All of the comparable sales that offer a ranch style home have converted to gas, forced air furnace and I mean all of the homes. (Your Realtor will tell you that baseboard heaters are desirable because you can heat each room as you’d like. Don’t be fooled by this statement. While this may be true, it is not always better.)

So I expand the market area and located one or two homes that offer baseboard heaters. The value of these two sales is less than my subject. The square footage is less than the subject. These sales are older than the subject. Do you see my dilemma? It gets difficult to determine if the baseboard heaters are actually pulling down the value. This is because I do not have any support for value within the subject’s immediate market area and the sales that I’ve selected are older sales and offer less square footage.

Do you know what it cost to install a gas, forced air system? You need all of the duct work, the furnace and a gas line and gas meter to your home. All of this duct work and furnace installation could cost up to $15,000 or more. While it is difficult to determine value for these types of things, the best thing that a home buyer can do is to look at the comparable sales in the area, look at the comparable sales outside the area that offer baseboard heating. Look at any of the differences defined by the market.

Next, call up contractors and find out what it will cost to bring the heat source to your home. Here’s what you’ll need to find out. What will it cost to install a heat source that is similar to most of the other homes (most of the time, in this area is gas, forced air furnace). This means running the gas line to your home, installing a gas furnace and installing all of the duct work.

What’s it going to cost you? Usually, baseboard heaters are less efficient heat source and these types of heaters will cost you more money to heat your home year after year. It will cost you to install a new furnace. It may cost you if your try and refinance and the appraiser has limited comparable sales to pick from, as a result, it drags your home value downward. It may cost you to sell of your home, because all of the other homes in the area already have the desired heat source. So what do non-conforming heat source, baseboard heaters and losing money have in common? You’ll find out if you don’t think this one through.