Some people assume that all renovations done to the home will add value. As a matter of fact most people spend thousands of dollars on expensive upgrades and renovations over a period of time. What these people forget is that the next owner may not like the renovations. Everybody needs to remember that your home is only worth that of homes of comparable size are appraised at, not necessarily by the characteristics of your home. Yes, some qualities are highly sought after like garages, finished basements, enclosed yards or large kitchens but you need that certain buyer to appreciate them. Many of these things that are assumed to add value don’t add value at all.
SWIMMING POOLS– Although some people may love the idea, most people dread it. They are hard to keep clean and maintain. They are a safety hazard to a family with young children and even pets. If your house already has a pool keep it clean well maintained for perspective buyers but don’t put one in thinking you are adding value.
OVER RENOVATING FOR YOUR NEIGHBORHOOD- If you are making expensive renovations that will make your property stick out like a sore thumb (or a pretty thumb as the case may be) or drive its price/value up compared to other homes in the area you are likely making a big mistake. Some potential buyers may only see the higher taxes they will be paying (compared to the other homes in the neighborhood) because of the higher tax assessed value or might even be concerned that they will be viewed by the neighbors as “pretentious”. Also, if no other homes in the area carry these characteristics, it is likely not to appraise for the value needed.
EXTENSIVE LANDSCAPE- Chances are the new owners will do their own landscaping. Why would they pay you extra for something that may not appeal to them? Just make sure that the bushes are well groomed, leaves picked up and the grass is mowed and you will be fine. Also, you never know if your property might be on the market after snow falls and then it won’t be appreciated.
HIGH END UPGRADES- They may appeal to you but again not to the potential buyer. These can include stainless steel appliances, imported tiles, fancy bathtubs, built in Jacuzzis, handmade wallpaper, Persian rugs, expensive light fixtures etc… Again, most people will want to personalize their own home.
WALL TO WALL CARPETING- You will be better off leaving what you have as it is. If you have wooden flooring you may be better off leaving it that way. Simply sand them down and give them a shiny coat of polyurethane. It is easier to cover a wooden floor than it is to rip out carpeting. If you have carpeting, give it a professional carpet clean. Make sure they treat any noticeable stains. Remember, the buyer will make changes.
INVISIBLE IMPROVEMENTS- While they may look good on paper don’t expect potential buyers to pay a higher price because you went out and spent a ton of money on new plumbing or a new HVAC system for the house. In general most buyers are most impressed by what they see and not to what is hidden behind walls or in the basement. Ultimately, they will probably feel entitled to these things like a buyer of a car feels entitled to the new tires, spotless upholstery or CD player.
A WELL DECORATED OR REMODELED BASEMENT– While some people may be searching for a basement with these features they won’t necessarily pay more than the house is worth (remember: the house is only worth what comparable homes in the area are worth) just because the basement is ready to move into. It may help seal the deal but it probably will not pay for itself. The only possible exception to this might be if you’re adding a legal bedroom or two to the home.
BIULDING OR UPGRADING A DECK- Decks are a great addition to a home but this is something that some people might want to tackle themselves and may not like the design you picked out or the quality of work. If you already have a deck you may want to stain or reseal it prior to listing your home.
PATIO AND PLAYGROUND EQUIPMENT- Some people think they can get their money back if they invest in water fountains, fish ponds, awnings, gazebos or a multipurpose playground. These things may help impress a buyer and help clinch a sale but they will not generally increase the value of your home or at least not equal what you spent on the luxuries.
THE ADDITION OR EXPANSION OF A GARAGE OR “CARPORT”- While many people acknowledge that a garage can be very useful, this does not mean that they will necessarily pay more for a house just because the owner recently added a garage or added a carport to it. People will assume that the addition benefited the owner as much as it may benefit them. In other words it is not something that they will necessarily feel they should pay for.
The long and short of it is this. While some of the listed items might help in selling your home they won’t necessarily increase the value equal to what you invested in the renovation. Do your research before investing a lot of money on any of the above. Do the math!
Charles Dailey – Branch Manager, Loan Officer, Certified Military Housing Specialist – CA DOC, MN DOC & WI DFI
The Home Buyers Scouting Report® is provided directly to the buyer by HBM II, a licensed national real estate brokerage service company, not to or through a lender. The FREE home finding service is provided directly to prospective homebuyers by HBM II and its real estate brokers, as part of their ordinary real estate brokerage services. HBM II, Inc. works cooperatively with other real estate agents across the United States in attempting to find ready, willing and able buyers for homes listed for sale. The role of the Preferred Loan Officer is to assist in determining a comfortable home price range for Home Buyers Marketing II, Inc. (HBM II) to use when it is searching for property listings within the buyer’s search criteria.
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