When buying a new home, what upgrades should we go for? What holds the most value? Do we upgrade the lot? Pick more square footage in the house? Add an extra bedroom? etc.

A lot depends on why you are buying the house. Are you buying it mostly as a home or mostly as an investment? There is a difference. For the most part, upgrades are high-profit items for builders. They aren't designed to enhance the value of the house, but make you happier with the house you do buy. If you are looking at your 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 living. One rule of thumb is to always upgrade the carpet and padding.

I need to buy a house with a good resale value. How do I determine if my house will increase in value within the next five years so that I can upgrade? Should I buy a smaller house in a great location or get twice as much in a good location. Which is a wiser decision?

It's like buying stocks. How do you really know which ones will increase most in value over the next five years? As with any investment, there are risks. The most often quoted rule is that location is the most important factor. You want to make sure that the house does not back to busy streets and is as close to the interior of the tract as possible. Avoid corners and intersections. Choose the middle of the block. You'll want to be sure it has at least two bathrooms (if you are buying in an older area). Sometimes it is just timing that works out best for you. For example, if you buy a home before a major surge in local prices.

How do you know whether the price of a home per square foot is reasonable or if you are about to make a bad decision?

Though this seems like an easy question, it is not as simple as it sounds. Keep in mind that much more goes into the market value of a house than its square footage. For example, two houses next door to each other can have the same square footage, but if one has two bathrooms and the other has only one, guess which one will probably be worth more? It will also cost more per square foot. However, if you compare recent sales of similar homes, the cost per square foot should be similar to those properties. You can ask your agent to provide you with comparable sales data.

How can I find out how much my house is worth? There are no comparable homes in my area.

This may be a bad sign for you, especially if you think your house is worth more than other houses in your neighborhood. Homes maintain their value better if the neighboring properties are fairly similar. In your situation, you may actually have to talk to several Realtors, get their opinions, and come up with some sort of consensus. Without knowing why there are no comparable properties in your area it is difficult to give another suggestion. If your lot or home is over-improved for the area, then the value will most not likely be what you think it is. If your home is much larger, you might not get the same cost per square foot as other homes in the area. So I would talk to a bunch of Realtors and get their opinions.