The phenomena of “HOME VALUE” can be a mystery. The technique to its measurement is as elusive as defining beauty — well known for being “in the eye of the beholder.” Although REALTORs, have the upper hand with their technological advances in compiling data of past sales, active sales and pending sales, much of the calculation of determining ‘total value’ is subjective. The BUYERS will decide what it is that makes one home more desirable than the other, it is their perception of VALUE that solidifies a sale. Appraisers and REALTORs merely provide the stats and market trends. In this soft market, the BUYER decides if he wants to take the figures at face value. Most of the time, buying a home is not always all logical; so, SELLERS need to be prepared to showcase their home in its top level condition.
You’ve got your HELOC or are ready to tap into your savings to get your home spruced up with some home improvements. You’re energized at the prospective return you might receive with the changes you instill. What are some things to avoid when considering a home improvement? What are some things that can decrease the value of your home?
1. Avoid being ‘trendy’ in your paint choices. Turquoise trimmings, red wall paint, & multi-color paint combos in a room may be stylish now, however, the bold colors may turn off prospective buyers. For some, looking at the trendy paint is a liability. Instead of seeing it as sheik & up-style, I’ve heard buyers verbalize their apprehensions on taking on a home that will need repainting because of the added costs to their move-in budget. By choosing a more neutral color palette, you are increasing your base of interested buyers, thus, increasing your chances of selling.
2. Avoid installing a pool. If you install a pool in your home, you usually will not be able to recoup the cost of installation. Most buyers see pools as another cost that they may not be able to handle, i.e. anticipated maintenance, miscellaneous repairs, safety issues. The less cost a buyer perceives he can get away with upon move-in on a home, the more he will gravitate towards that home. However, homeowners with pools find greater value in the enjoyment experienced than without having one. A buyer can be found for a home with a pool, but the likelihood decreases in comparison to selling a home without a pool because the pool home instantly appeals to only one set of buyers. A home without a pool can be both be accepted by a buyer who doesn’t care for a pool and a buyer who may potentially want to install one on their own.
3. Avoid ignoring the easy fixes. Buyers are entitled to a home inspection before fully committing to purchasing a home. If within the agreed upon investigation period, a buyer may choose to cancel his agreement to purchase after discovering the results of the home inspection. Although there may not be any major repairs noted on the inspection, minor repairs perceived by the buyer to be too excessive for their own ability to correct gives the buyers the right to back out from the sale especially if the seller refuses to repair the items as part of the negotiation. Sellers can lose the entire sale because they opted on forgoing the investment of taking care of the easy fixes.
4. Avoid procrastination of fixing the major repairs. As a basic want, most buyers expect a home to be in good working order — no leaky roof, no warped foundations, no missing walls. However, buyers can usually deal with a few minor, cosmetic repairs. Because of the high home prices and increased inventory, buyers are more choosy and selective when making a final decision on a home. As a seller, it is to their advantage to just take care of the major repair rather than hoping to hook a buyer who will accept it as-is or will accept a credit for the repair during negotiation. A home listed during the summer without a roof, for example, can sit on the market for months on end. If that home is still on the market by winter, weather conditions can cause more damage to the home which can further ward away potential buyers and decrease that home’s value.
5. Avoid settling for outdated appliances. Sellers who put in the extra effort to update their appliances, add extra value to their home. By keeping old appliances in your kitchen, your home may not have that extra appeal that buyers are looking for when house hunting. In fact, the real estate market has also caused builders of new homes to offer incentives like new appliances to bring buyers in their direction. Failure to change outdated appliances may prevent your home from being considered during a buyer’s house hunting efforts. By increasing the intangible desirability factor with updated appliances, may result in more buyers simultaneously placing an offer on your home, thus, giving you the sale.
6. Avoid skimping on quality materials for your flooring, counters, etc. Buyers love natural materials in the home like wood, bamboo, granite, hemp fibers, etc. versus manufactured materials like linoleum floors and plastic shower curtains. Quality materials in a home increase the perception of value and luxury when seen by the eyes of the buyer. When you can appeal to the buyer’s desirability factor, they will choose your home over another similarly priced home ultimately resulting in an offer to purchase.
7. Avoid showcasing your clutter. A cluttered home only detracts from the home’s potential and tells a buyer that the home lacks storage. When choosing a home improvement to increase your home’s value, choose to add to your home’s storage capability like closet organizers, built-in shelving and cabinetry.
Although REALTORs and appraisers will give you a VALUE on your home upon researching, analyzing and comparing market data, the price of the home at closing is ultimately determined between buyer and seller and how motivated each party is to attain or relinquish the home.
