Before making the decision to buy a home, the buyer should be clear in his/her mind on the reason and the expectations involved in the decision.  Are you buying to raise a family and plan to live in the home long term or are you buying to invest rather than rent and plan to sell whenever you feel your home’s appraised value will result in an acceptable profit. 

If you are looking at a new home as an investment, then you buy from the smaller to medium size in the tract and spend only a minimal amount on upgrades.  If you are looking at your purchase as a home, then you select upgrades that will enhance your quality of life.  If you buy a cheaper, older home, you want to focus on upgrading bathrooms, the kitchen, the colors, carpet and padding, keeping in mind what comparable homes in the area or especially the subdivision are selling for.  You do not want to become the most expensive house in the subdivision.

Appraisers will always compare a subdivision home to comparables in the same subdivision.  It is very difficult to rationalize a value higher than the subdivision, even if the homeowner has invested heavily in the home.  The exception would be a property located in an older neighborhood in a hot location, which is “improving” and where most homes are undergoing substantial upgrading and remodeling.