So you’re either wondering what your current barndominium is worth. Or, if you haven’t built yet, you’re wondering if it will appraise for what you will have invested in it. What is your barndominium resale value? Real estate giant Zillow.com reports over 200 barndominiums currently for sale in Texas alone at prices ranging from $75,000 (1200 sq ft) to $4,190,000 (4600 sq ft on 732 acres). However, your barndominium, just like any property listed for sale, is — or will be — worth whatever someone is willing to pay for it. That being said, figuring out the asking price of your barndo could be straightforward and simple or tricky and complex, depending on the uniqueness and customization of your property. The good thing about owning a barndominium is that they have grown immensely in popularity over the past several years. In fact, Wikipedia has a designated page for the word “barndominium,” and real estate sites, such as Zillow offer barndominiums for sale under their own category. Since the barndominium building trend began around five years ago, they seem to retain their value and sell competitively. The bad thing about owning and selling your barndo, however, is that, because they can be so unique, it may be difficult to appraise their true value.
How to figure out what your barndominium is worthEven though your barndominium is different from a traditional home, you probably either will have it custom-designed and built, or you will construct the building yourself. Either way, you will know how much it cost to construct, so you will have a good place to start when estimating its worth. You can also use more traditional resources to get a more specific valuation of your barndo. To get an initial, more generalized idea of what your barndo may be worth, try using the internet to help.
Use an Automated Valuation ModelAn automated valuation model, or AVM for short, uses public records, such as property transfers, deeds of ownership, tax assessments, and fancy algorithms to determine a home’s value. Websites like Zillow and Redfin offer an AVM. AVMs offered by websites are considered rough estimates, but you can obtain a more accurate one through a lender or real estate professional. They use AVMs in conjunction with a “confidence score” to better estimate the market value of your barn home. For example, a confidence score of 85% means that the estimate is within 15% of market value.
Federal Housing Financing Agency (FHFA Calculator)Another way of getting a quick and general estimate of what your home is worth is with the Federal Housing Financing Agency’s (FHFA) house price index (HPI) calculator. This easy-to-use tool uses a “repeat sales” method to estimate how home values change in a given market. As the site states, it won’t project the actual value of any home, but it gives a good estimation:
“What a given house purchased at a point in time would be worth today if it appreciated at the average appreciation rate of all homes in the area.”
Source: FHFA Government SiteSince barndominiums, on average, seem to retain their value well, this might be a great tool to use in determining an asking price. By putting in your initial purchase or build-out cost, the HPI calculator can let you know what it may be worth today.
Get your barndo professionally appraisedEnlisting the help of a professional appraiser when you’re ready to sell can be very beneficial when you want to determine your barn home’s worth. Lenders will require an appraisal before they approve a mortgage, so whether you just built it –or have had it for years — improve your selling position and give your buyer a highly credible figure he can take to the bank. Get a jumpstart on the process by having an appraisal performed beforehand. Many owners even have an appraisal done right after they build soo they can feel good about their investment. An appraiser will be able to offer a professional opinion compiled in an official report, based on their evaluations of:
- The Market – The location (neighborhood, city, and state) in which your barndo is located.
- The Property – Specific characteristics of your barndo, including the land it is on.
- The Comparables – Listings and sales of similar properties in your area.
The challenges of appraising your barndoAppraising the uniqueness of your barndo may be difficult because there may be nothing like it, and it will stick out from traditionally appraised homes. Appraisers will need to take into account its construction – whether it’s a refurbished barn, a pre-fabricated metal structure, or one built from scratch either in steel or lumber – along with its customized interior and typically rural location, including the surrounding land. They will also have to factor in that barndominiums are cheaper to construct than a traditional house. For example, according to Home Advisor, the average cost to build a traditional new home is about $150 per square foot. The average cost to build a barndominium is around $95 to $125 a square foot. Appraisers will need to do their due diligence with additional research when finding the appropriate market value of your barndo. This may mean that they will need to use a wider geographical range and look further back in time for more market data.
The best way to appraise your barndoAs more barndominiums become available on the market, appraising them becomes less tricky. Different things an appraiser will need to look for include:
Main space or extra space – Some barndominiums have extra spaces that are considered guest houses or living quarters for a ranch hand. If the living space is not a part of the main living area, it will not be included in the main living area but as an additional feature.
Quality – The quality of construction will be considered in the appraisal, as not all barndominiums are of the same quality. Just as some custom homes have higher grade finishes and features, the same can be found in barndominiums. It is important to compare your barndo — especially your custom interior — with similar quality of construction in stick-built homes in your county if possible.
Lot size – Barndominiums are typically on acreage, and the size of the acreage will impact the appraisal. Ideally, if an appraiser is appraising a 2,500-square-foot barndominium on 20 acres, they would love to find comparables of similar sized square feet on as close to 20 acres as possible.
Location – As always in real estate, location is the biggest factor influencing value. A barndominium located next to a river or on prime hunting land will have a much different value than a barndo located next to a cement plant or in an industrial area.
Additional buildings & features – Appraisers will also take into consideration additional improvements to a property such as workshops, multiple barns, arenas, fencing, and more. All of these factors need to be taken into consideration for an accurate market value
Compare your barndo to othersLooking at the comparable homes (“comps”) in your area is one of the best ways to determine market value, and you can do a general search yourself without having to pay an appraiser. No matter how seemingly odd or extraordinary a home is, every property has four elements in common that help determine its worth – square footage, number of rooms, lot size, and location. Using these factors, and comparing them to other similar homes on the market, can give you a solid foundation in determining a fair price for your barndo. Looking for accurate comps may be difficult with such a unique home, though, especially since you should be taking an “apples-to-apples” approach in comparing. The best way to start is to think about properties that would interest a buyer if your barndo wasn’t available. You can begin by doing a basic search of the comps in your area (or extended area) to give you a baseline. From there, you can price your barn home up or down depending on its condition, its customization, and its desirability.
How to pull comps for your barndominium:
- Enlist the help of a real estate agent who can provide you with comp searches through the Multiple Listing Service (MLS). The MLS is a database of properties that have been sold or are currently for sale in a given area. Pulling MLS comps is a respected method of setting a list price, but you will need a realtor to provide you with this information.
- There are many local MLS databases (especially in the south) that have added the term “barndominium” as a style of home, making it easier to search for it specifically.
- Search for comps yourself on any of the online real estate websites, such as Zillow, Redfin, Trulia or Realtor.com. By using the “Recently Sold” filter, you can search comparable homes for sale in your area.
- Get at least three valid comps to come up with a good range of market value for your barndo.
But what is your barndominium really worth?Once you have found comparable properties, things can get a little dicey. There will still be differences between your barndominium and others that will cause you to have to adjust your value. Also, how much you adjust will depend on your market conditions, such as how fast or slow barn homes are selling in your area. When it comes to custom-created barndominiums, no two are alike. Take a look at a comparison between four barndominiums for sale, all having two bedrooms and two bathrooms with 1,200 square feet of space in Texas.
|Price||Price per SqFt||Acreage||Features||Year Built|
|$99,900||$83||5.1||Attached shop with four-car stall and roll-up doors, fishing pond||2009|
|$282,000||$235||9.7||Animal shelter, covered porch, fireplace, metal storage shed||2010|
|$315,000||$262||N/A||On lake with dock, boat house and swim platform||2014|
|$499,000||$416||58||Hunting land, two fishing ponds, attached shop, fenced area with electrified gate||2013|
Factors that influence buyers of barndominiumsMost likely, you didn’t design and build your barndominium with potential buyers in mind. Your barndo, no doubt, is as unique as you are, with specific characteristics that suited your wants and needs. But when it’s time to sell, you have to think like a buyer. Typically, if a buyer is considering your barn home at all, then there is something that intrigues them about purchasing the unique structure. However, there are some factors that you need to keep in mind:
The negative factorsThe interior layout. The reasons that people choose to buy a barndo are as varied as the way they can use its space. But typically, you will have already highly customized it to fit your needs.
This may include a lower-level horse stable, an attached workshop, a music studio, or a commercial space. You will need to keep in mind that your pool of potential buyers will get smaller with the more customizations you have.The exterior look. Barndominiums are usually less aesthetically pleasing than traditional homes. Your barndo may not have the curb appeal that some homebuyers are looking for. The property. Most barndominiums are in rural areas with large plots of land. It may be an overwhelming amount of land for some. Also, the use of land may be a problem.
For example, if an animal rescue center or petting zoo (complete with animals) comes with the purchase of your barndo, your pool of buyers just got even smaller.The financing. Conventional mortgages are more difficult to obtain when purchasing a barndominium. Financing is made difficult because of the lack of comparable sales that are needed for the appraisal process.
Also, some barn homes aren’t considered homes at all. Because of the dual use of most barndominiums, they could be considered commercial properties.
The positive factorsThe interior layout. Buyers wanting to buy barndominiums will be looking for open spaces and unique layouts (as long as they aren’t too unique). Also, since most barndos are relatively new, all mechanical, electrical and appliances should be updated and new. The exterior look. Buyers will be pleased when they realize how little maintenance is needed for most barndominiums. Metal buildings require very little upkeep. The property. Buyers who want a barndominium are most likely also looking for land to go with it. And if you have features like a fishing pond, wooded area or hunting land, your property just got more desirable. The financing. Now that barndominiums have become more popular – thanks in part to HGTV’s show Fixer Upper and their Barndominium build in 2016 – appraisers are finding that barndos hold their value well. Also, most Farm Credit Bureau lenders welcome the financing of barndos, and there is a branch in almost every state. The savings. Barndominiums have much lower tax and insurance rates. This is because their overall value is often not as high as traditional homes.
Tips to help sell your barndominiumSince your barn home is a unique space, you will most likely need unique tactics to help sell it. Although it might not hurt to bake a batch of cookies or fill your barndo with fresh flowers before an open house, these efforts alone probably won’t help sell it. You may need to resort to some of these tactics:
- Creative staging – Make your barndo as appealing to as many buyers as possible by creating welcoming spaces and, if needed, show how versatile the areas of your barndominium are.
- If necessary, invest in a professional home stager to help you. (To find one near you, just type”professional home stager” into Google’s search bar, say “okay” when it asks for your location, and choose the pro nearest you.)
- Have a party – Don’t just have an open house, have an event. This is especially effective if you have a property to show off, as well. Have a mini carnival, cater food, play live music, and/or give away prizes.
Still more tips
- Help with financing – Sellers have a few options when it comes to assisting buyers with financing, including offering lease-to-own deals, offering to finance themselves, paying for closing costs or paying for points to lower the interest rate.
- Throw in extra incentives – If you have an attached workshop full of tools or a garage full of four-wheelers and other ride-on toys, consider throwing them in with the deal. Or, you can offer to pay your buyer’s moving expenses.
- Get web savvy – Utilize Facebook as a marketing tool for your extraordinary property. You can also create an Instagram Story with proper engagement, such as the use of GIFs, a Q&A section, and polls. The more people engage with you, the more they will remember you.
- Let buyers sleep on it – or in it – For serious potential buyers who are on the fence about buying your home, let them sleep on it … literally. By letting buyers spend the night in your barn home, you’re allowing them to get the full experience of living there.
- A trial run could be just what they need to sign on the dotted line. Be sure to consult with your real estate agent or an attorney first.