ElevenThreats to the Value of Your Home (and how to mitigate them without going broke)
When youre getting ready to sell your home, it may seem difficult to determine its value. When you look at your home, you see the place you raised your family or the place you spent your retirement years, or the first home you and your spouse purchased together. Potential buyers, however, see none of that. Instead, they see the condition of the carpets, the distance from the elementary school, or an open floor plan.
In order to get the highest price possible, its helpful to know which factors could be harmful to the value of your home, whether you plan to sell now or sometime in the future. Some factors, such as location, are outside of your control; however, others are easy to solve.
Although people in different communities value different factors when looking for a home, these 13 threats to your homes value and their potential impacts can help you know where to focus your efforts in increasing it.
1. Location Threat to value: Potentially high 50% or more
Weve all heard it; the three most important factors in determining a homes value are location, location, location.
You most likely considered location when you bought your home, but the surroundings may have changed since then. An increase in crime, rezoning, or a newly city dump can negatively affect value.
Its possible to change the house, remodel it or change its layout, but unless you plan to move the house, not much can be done about its location.
So, what can you do? First, consider what it is about the location that is bringing down its value. If its the view of the city dump, consider planting privacy hedges to block it. Be sure to emphasize the houses strengths by perfecting its interior and exterior features. Its possible that someone will overlook location if everything else about the house is just right.
2. Lack of Updates Threat to value: Low to medium typically at least 10%
When there is a large supply of homes on the market, buyers can be picky. If they see an outdated kitchen with old appliances and dont want to undertake a remodel project, they will simply keep looking for a house where they don't have to.
Fortunately, a lack of updates is a threat that can easily be fixed. Spending money on new carpets, appliances, paint and countertops can you a return of at least 2-3 times what you spend when its time to sell.
3. Undesirable Floor Plan Threat to value: Medium to high up to 25%
Many buyers are looking for open floor plans. Again, with an oversupply of homes on the market, they will pass up homes with spaces that feel small and closed in.
Short of completely restructuring the interior of your home, there isnt much you can do about the floor plan. However, you can maximize the spaces by keeping them sparsely furnished, free of clutter, and bright with as much natural light as possible.
4. Foreclosures Threat to value: Varies
A number of foreclosures in your neighborhood will cause your home to lose value, but just how much is difficult to quantify. In areas with a high volume of foreclosure properties, it can bring down the rest of the market, partially due to the fact that appraisers use those homes as comparables.
It is impossible for you to control the number of foreclosures in your area, but you do need to understand its impact. It may be that the only way to sell your home is to price it according to the market, as if it was in foreclosure. If at all possible, if you are surrounded by foreclosures and dont need to sell your home right away, wait to sell until things have changed.
5. Rental Properties Threat to value: Medium up to 15%
The presence of renters is not so much a threat to your homes value as is the fact that the rental homes are often not well maintained. Both absentee owners and the renters are often unmotivated to put time and money into maintaining the homes. Buyers are aware of this, and often avoid neighborhoods with a high percentage of rentals.
Although you cant change the number of rentals in your neighborhood, you can maintain good relationships with owners and renters, and you can volunteer to help maintain the homes.
6. Major Systems and Structures Threat to value: Medium to high up to 20%
When buyers walk into a home and see a roof that needs replacing or learn that the plumbing material is faulty after an inspection, they immediately start thinking about how much it will cost for them to take on the repairs. Issues like this can stop a deal in its tracks, especially in high-end neighborhoods. A roof that needs replacing could reduce a homes value by 15% , a heating and air conditioning system in need of repair could reduce it by 20%, electrical system problems by 8-10%.
Before listing your home, have an inspection done. It may seem redundant as buyers will want one done, however, fixing the major things brought up in an inspection before your home is on the market will mean a higher sale price for you.
7. No garage Threat to value: Varies usually about $5,000 per stall
Without question, a garage adds value to a home, however, the type of garage will depend on the type of house. A one-car garage attached to a small starter home is a great feature, but on a large high-end home, that will present a problem.
8. No fence Threat to value: Low 5 to 10%
Many buyers are looking for homes with fences to safely contain children or pets, and they see future expenses when they see a home without one. There is also value in outdoor living spaces such as patios or decks.
Having a fence built is a relatively low cost that will pay off when you sell your home, and many times neighbors are willing to split the cost of a fence when it benefits them as well. While youre at it, building a deck or patio onto your home will increase the value of your home as well.
9. Stigma Threat to value: Varies
At times, a houses history can affect the perceived value of a home. If a death occurred in the home, if it was once a center of drug or criminal activity, or if other houses in the area were lost to a flood, buyers interest can be affected.
Topics in the nws can also affect a homes value. After news reports of health affects of living near power lines or cell phone towers, homes near them may be difficut to sell for a while.
It can be difficult but not impossible to change the stigma attached to a home or area. Making your house look comfortable, clean and bright can help potential buyers focus on the positive aspects instead of a nearby perceived problem or a checkered past.
10. Allergens Threat to value: Low to medium up to 15%
An increasing number of people are affected by allergens such as mold, pet dander and cigarette smoke. Buyers interest can be killed in an instant by the sight of mold growing in the closet or by a sneezing attack as they walk in the door.
Some of these issues, such as a dog in your family, may not be fixable, but others are well within your control. If you have issues with mold, have those dealt with as well as possible before listing your home. Although it often lingers in furniture and linens, the smell of cigarette smoke can be partially eliminated by a new coat of paint and replacing the carpet.
11. Fit and Polish Threat to value: Low 5-10%
Hows your curb appeal? Does your lawn need mowing? Is the paint on the outside of your house chipping and peeling? Is your garage door rusting?
The outside of a home is the first thing potential buyers see when they step out of the car. Visual unattractiveness can negatively affect your homes value and quickly turn buyers off. They begin to wonder what else they will find that will need work.
Inside your home, small things like a stain in the bathtub or a hole in the drywall can stand out to buyers. Although inexpensive repairs, they could make a big difference when its time to sell.
Fit and polish is relatively easy yet important for you to put effort into when selling your house. Fresh details like new paint on the walls or a new carpet can go a long ways.