I just pulled comparable sales on a house with an in-ground pool. The home is a split entry home with two bedrooms on the upper level and two bedrooms in the basement. This is what the appraiser will want to prove.

First, what are the sales in the immediate market area? Are there homes with similar design and curb appeal, square footage, and number of bedrooms? What about houses with swimming pools as a theme?

The first round of comparable sales will be selected to support the immediate area. The appraiser will pull comparable sales that match square footage, design and curb appeal, and number of bedrooms based on lot size. If the appraiser can find a home in the area that has sold within a year and offers similar square footage with similar amenities, then great, the appraiser will use this as a fourth comparable sale to support the in-ground pool. This will provide support for both the same type of home as the inground pool.

If there are no sales in the immediate area with similar services, the appraiser will search outside the immediate area. Your goal will be to find the same characteristics with homes that offer a general age and quality level similar to those of the subject. If the appraiser feels that the sale with an in-ground pool is not similar to the house, he will not use it. It’s best to use a home with similar square footage and layout with the same amenities.

If there are no pool sales, the market area will be expanded until one is found that supports the pool. So what is more important, the in-ground pool or the location? In most cases, the location will trump the inground pool. If a group is outside the market area, it must have some other similarities to be truly comparable to the subject. For example, if the subject is a split-entry house and offers two bedrooms, a two-bedroom house or a two-bedroom house may be acceptable.

If the market is considered stable and there is not much activity, an older sale with an in-ground pool will be acceptable. If the market is really fluctuating, this may not be the case. It will just depend on each comparable sale.

In this case, I used two sales to support the immediate market area. It is important to support the split entry design. I used two sales to support the design and appeal. Even if they are outside the immediate area, they at least offer homes of similar desirability, which is important in most cases. I considered two indents and used one indent to support the inground pool. In this case, they offered a different layout, but the same number of bedrooms.

It turned out that the inground pool added some value to the item (about $12,000). But here is the trick.

The pool installation cost $20,000 or more, probably the owner still hasn’t collected the full cost of the pool. So if you can get the pool installed and use it over the years, it may be worth it, but never, ever install an in-ground pool and think it will increase the value of your home.

Turns out this house was going to the FHA. There is a huge misconception about safety and in-ground pools. I talked to two HUD government employees about the inground pool. One in California and one in Alaska. No, I repeat, they require the pool to be fenced or covered with a safety cover if your local area (city or county) does not require it.

The only requirements they have is that the pool is filled with water and in good working order. Both HUD government employees told me that if they are approved by the city or county, they will pass the FHA requirements. If the appraiser thinks the in-ground pool is a safety hazard (children and adults drowning in the pool), the lender can override the appraisal condition and finance the loan, unless the city requires the pool to be fenced .