How to Price An Aging Deck Into A Real Estate Transaction

 

Sun, snow, pine needles, and time eventually crumble most any deck.  Buyers and seller need to  calculate deck depreciation when transacting real estate.

Every year that goes by makes it more likely that professional home inspectors, pest inspectors, and appraisers will “call out” the deck.  Lenders worry about health, safety, and structural integrity.  Buyers worry about repair costs. Since this comes up so often, it is worth knowing how to allow for this common problem

 

  1. Pretend the aging deck is brand new.  What would what you list your house for?  Let’s say it would sell for $370,000.
  2. Get a contractor to bid the tear down, removal, and replacement of the aging deck.  Let’s say $30,000
  3. Subtract the $30,000 total deck replacement cost from the $370,000 hypothetical list price as if the deck were new.

The result is $340,000.  This would be the price with no deck.

DEPRECIATION ADJUSTMENT
Decks age at different rates.  In the shade, and when covered, they last a lot longer than when exposed to full, sun at altitudes where snow is also a factor.
The main thing is that most decks still standing have some useful life remaining.  This is the last figure to understand.  Useful life can be estimated as a percentage of remaining life.  For instance, if a 30 year deck has 10 years left on it:

  • price of the home as if the deck were brand new, $370,000
  • figure out what a new deck would cost: $30,000
  • The new deck with one-third remaining useful life would be worth $10,000
  • ($370,000 – $30,000) + $10,000 = $350,000

Deck-adjusted list price of the home would be $350,000

 

 

 

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