You can make all the necessary repairs to your home, clean it, stage it, maybe even remodel it. But there are some factors that may impact the eventual sales price of your home that are out of your control. So, regardless of how impeccably you’ve maintained the home and despite its ideal location, one or more of these circumstance may rear its head and dash those dreams of riches at the closing table. Let’s take a look at three of the factors that may impact your home’s value.
1. The condition of the current market
You’ve no doubt heard real estate markets referred to as buyers’ sellers’ or balanced markets. A buyers’ market occurs when there are lots of homes for sale and few buyers competing for them. Since the buyer is in the driver’s seat, prices tend to stagnate or fall in this type of market. When the inventory of available homes is tight and there are many buyers seeking homes, we are in a sellers’ market and home prices rise. So, what creates these micro-markets? Many factors affect both national and local housing markets, chief among them is the strength of the economy. When times are good, consumers have money to buy homes and home prices typically increase. In tough times, when unemployment is high and incomes stagnant, the real estate market will feel the pinch. Then, there are interest rates. When they rise, many are priced out of the housing market and when they fall, folks clamor to buy homes. Therefore, the overall strength of the economy may help dictate the eventual sale price of your home.
2. Neighborhood changes
You may live on the peninsula of Naples, or walking distance to the shops and restaurants on the popular 2nd Street area in Long Beach, or close to the beach in Huntington Beach. These areas have gentrified and will definitely command greater attention and higher values from buyers. Yet your neighborhood, and the surrounding area, may look nothing like it did when you bought the home. Even the most careful research performed before committing to buy a home can’t foresee future zoning changes, the neighbor that builds an extra story on his home and blocks your view, or the sex offender that relocates to your neighborhood. All of these events can negatively impact your home’s value and, subsequently, how much you’ll receive when you sell it. Suppose a change in zoning allowed a dump or landfill to be placed near your neighborhood. Nearby home values will drop by as much as 7.3 percent according to Business Insider’s Mandi Woodruff. A power plant will ding your value from 4 to 7 percent, a sex offender as a neighbor will drag down your home’s value by up to 12 percent and, woe to you if a neighbor forecloses because, according to Woodruff, the national average loss of value of nearby homes is $7,200. Now, some neighborhood changes should be applauded, at least by nearby homeowners. There’s even a name for the phenomenon: The Walmart Effect. The name typically describes the economic impact on local businesses when a big-box store, such as Walmart, moves into the area, but it’s been found to apply to home values as well. So, if a Walmart comes to your neighborhood, rejoice – you may just get a 3 percent increase in home value, according to a study by the University of Chicago and Brigham Young University. And cheer loudly when you learn that a Starbucks is coming to town and hope that it’s within walking distance of your home. Real estate portal Zillow found that between 1997 and 2014, the average increase in home value nationwide was 65 percent. Homes within walking distance of a Starbucks, however, saw a hefty 96 percent increase. Add Trader Joe’s and Whole Foods to the list of please-come-to-my-neighborhood” businesses. If they do, your home may see a 17.5 percent increase in value.
3. Your real estate agent
While pricing a home for the market isn’t rocket science, it’s also not something that the inexperienced can do and meet with success. It takes years to learn how to properly research, to learn how to find truly comparable homes and all of the various other factors that go into determining a home’s current market value. If the wrong price is decided upon, your bottom line is impacted. Overpriced homes are notorious for eventually selling for far less than expected. Buyers’ agents know how much homes in a particular area are worth and won’t show their clients overpriced homes. So, they sit on the market. The listing becomes stale and agents and buyers think there must be something wrong with the home. Underpricing too much is also a gamble. You want to pick a price that is just enough under market value to really attract attention, and get as many buyers through the home as possible. After pricing a home, the number one job of a listing agent is to market the home to find the buyer that will pay the most amount of money (with the best terms) that the market will bear. Marketing not only requires know-how, but money as well. How well-versed in marketing techniques is your agent? Ensure that the agent you hire has a marketing plan that speaks to the specific types of buyers that are best suited for your property, and isn’t afraid to spend what it takes to get your home sold. You’ll pay the same amount of money for the services of an agent who gives you bare-bones service (stick a sign in the ground and throw it up on the MLS and keep fingers crossed) as you will for the professional – so choose wisely.
We definitely don’t blame you for wanting to squeeze every last penny out of the sale of your home. And, aside from these handful of factors above over which you have no control (location, foreclosures or sexual predators nearby, etc), there are some inexpensive cosmetic changes you can make that will appeal to buyers, raising the home’s perceived value.
Even if your home isn’t located in a neighborhood that buyers clamor for, giving it maximum curb appeal will go a long way in getting them out of the car and up to the door.
Let’s take a look at some simple “fixes” you can perform that will ensure that those touring your home fall in love the minute they step through the front door.
1. Create a positive second impression
You know that curb appeal is your home’s first impression. The second? What the buyer sees when the real estate agent opens the door and they step through. If you don’t have an evident entry area, it’s time to create one.
What you use to create this area depends to a large extent on the size. Even the smallest homes, however, have space inside the front door to set a mood, from setting out a simple throw rug and small console table or interesting single chair to getting more elaborate with attractive lighting and accessories. A mirror, by the way, is the ideal accessory for a small foyer as it helps the area look larger.
If you have room, a couple of items you must include in the area are a vase of flowers or healthy potted plant and a table lamp. Then, keep the area clutter-free while the home is on the market.
Next, stand in your foyer and take a look around for anything that appears dated. If it can be seen from the entryway, such as that 1970s light fixture in the hallway, it needs to be updated.
2. Bathrooms matter
Bathrooms and kitchens frequently make or break real estate deals. The former can be a particular turnoff if not updated, staged and kept impeccably tidy. Luckily, it costs far less to give bathrooms a bit of pizzazz than kitchens, so let’s get to it.
If you have a shower curtain, replace it. If you have glass shower doors, clean them. Now, those are the no-brainer basics. To glam it up a bit will require a bit more money and elbow grease.
- Change out the linens to match or contrast with the shower curtain.
- Purchase a new faucet for the sink
- Sheet mirrors are boring, so if you have one, and don’t want to replace it, consider framing it.
- Strip “Hollywood” style lighting screams “DATED!” so leave some money in the budget to replace it with something more contemporary. Consider placing sconces on to each side of the mirror where they don’t cast as harsh a light as they do when placed overhead.
3. Do pay attention to the small stuff
The warning from home stagers to “depersonalize” and “declutter” doesn’t mean leaving the home devoid of all personality. Accessories are an important aspect of reaching out to a homebuyer’s emotions and, if chosen carefully, may raise the perceived value of the home to those buyers. One of my condo listings had a buyer that decided to make an offer on the property simply because she felt a real connection with the owner’s lifestyle books that were all throughout the bookcases in the home, and could then visualize herself living there, too.
A home’s accessories include everything from throw rugs and art work to the pulls and knobs on cabinets. The latter is a good place to start adding back in a bit of character to the home.
Then, choose a color that you’d like to make primary – perhaps a soft blue in a piece of artwork or a color from your upholstered furniture. Then, use that when choosing accessories. For instance, purchase soft blue pillows for the sofa or candles or a vase in that shade. Sprinkled subtly around the room, these accents bring balance to the area, according to Tracy Kay Griffin, former designer for HGTV’s “Get it Sold.”
“We use lots of coffee table books, add curated collectibles to bookshelves, toss market baskets onto chairs, hang original art and use only real plants to give buyers the impression that someone actually lives there,” she adds.
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