21 Potential Re-Sale Problems Buying a home is a 90% an emotional purchase. As a real estate agent over and over I see buyers buy a home on "liking it" versus the "best value". I have seen people buy a home 300 sq foot smaller home for the same price. The one they bought the one that had something that appealed to them. To them it was the right purchase. The best value no. You should tap into your emotional knowledge, and be aware of your responses on all levels when choosing a home. Homes are places where you and your family should feel comfortable, renewed, and protected. Your decision to purchase a home is a personal choice, taking in many factors. As a real estate agent I will advise you on what is a good value, what I think, and give your my market experience. But it is your home, your life, you decision. I'm not going to live there, you are. The choice is ultimately yours. I will show you the homes, give you the facts, and you make the decision on which home you want.
However, there will come a time when you want to re-sell the home. Years ago many areas were getting 3- 5% annual appreciation on the sales price. Now that has changed. It is more important to think about resale. Homes that have re-sale issues are going for a lot less money. Think about when you are going to sell the home in the future and consider any possible difficulties that you may encounter. The investment value of your home is directly related to its salability. If it is in demand by other buyers, your home will sell at the highest level possible for the market. What you think is a plus may be a negative to others. (ie. being right next door to the school was great for your kids, but may be a negative to an older couple with no kids)
The issues noted here are not necessarily deal killers. The home you would like to buy may have a few defects, yet meets your needs in many ways. No home will be perfect. However, your decision should be supported by careful evaluation.
Investors and home flippers look for homes with marketability problems. They are often priced below market, and are perfect for their remodeling solutions. You, too, can think creatively when considering a home. Some problems can be corrected or mitigated. You may be able to make the design decisions and do the work yourself. Or, you may need to hire design and building help. Solving marketing problems adds a greater level of risk to your home purchase, but possibly, a higher level of satisfaction and monetary reward. Remember, a home that appeals to the greatest number of buyers will sell quicker.
Here are 21 potential re-sale problems:
1. Unusual Easements or RestrictionsIf unusual easements or restrictions were not disclosed up front, you may not be aware of them until you see the survey and title work. If you discover these, I suggest that you take a step back, and consider whether you will accept an unusual easement or restriction on your use of the property. Some examples: neighbors may cross the property to get to common areas, pets are prohibited, or major utilities cross property .
2. Lack of Yard If a home has much less yard area than others in the neighborhood, buyers tend to eliminate this choice. A steep slope may make the grounds difficult to use and maintain. Yards that have been terraced or landscaped may be exceptions. Compare your property to the yards offered by competing homes.
3. Flag LotThese are lots with a long narrow strip, leading to the area where the house is placed. These homes will have almost no street frontage, and there may be another home in front of the home. The home may only have an easement to get to the home. A flag lot in a country setting with a long driveway leading to a large tract may be an exception to the rule. In a subdivision of homes with road frontage, buyers will avoid this type of lot.
4. High Tension Wires & cell towersThe general reaction by buyers to high tension wires crossing near the lot is to simply eliminate the choice. Not many people like buying homes looking out to towers. It reduces the number of buyers and your home will sit on the market longer.
5. Steep DrivewayIn Michigan people think about how they are going to get up and down them in the snow. People are worried about backing off the side or sliding down the hill.
6. Busy StreetThe noise related to a busy street is a turn-off to many buyers. This is more of a problem if the busy street is in front of the house and traffic is more visible.
7. Declining ValuesIf you perceive the neighborhood to be declining, this is a must to avoid. Choose areas that show pride in ownership. However, if you see tear downs and new construction, then the neighborhood may be going through a renewal period, and may be a good risk. 8. Safety or Security Problems If you sense that there are security problems - burglaries, drug trafficing, or safety problems for your children, take a step back and look at the facts and data on these issues before buying. These kind of problems will turn away buyers fast.
9. Extended Marketing TimeHas the home that you are considering been on the market a long time? In the market of 2007 this is normal. The price was probably set too high? Has the market been slow? The one you need to think about is the house on the market because of some of the items we are discussing here. If it is on the market a long time becuase of a bad room layout, or close to a busy road you most likely will have the same problem. Or, is there a problem with the house that you will need to correct or can correct?
10. Remote LocationIn most cities, areas that are closer to downtown tend to have a larger buyer pool than homes located in remote areas. However, you may choose to trade the privacy and setting of a country home with the resale potential. If gas continues to go up will the house out of the city have a great resale value. Or will traffic congestion make the commute to long?
11. No Comparable SalesThis indicates a possible re-sale problem. The home may be very unusual compared to homes around it, or the market may be slow. Understand the underlying reason for few or no comparable sales. You don't want to be the largest home in the neighborhood, or the only log home, or the only contempary home.12. Lacks a Typical AmenityIn an area where nearly all homes are on the golf course, or have a basement, or include a garage, buyers will tend to avoid homes that lack these features. In an area of mostly older buyers, a home with the main bedroom upstairs may have trouble selling. Look carefully at what is generally offered in a given area. Usually you want to buy a home with a basement.13. Unusual ArchitectureHomes that do not fit in to the neighborhood may have trouble selling. For example, the contemporary style home may not be a good fit in older wood frame areas. It would be hard to sell a uniform suburban neighborhood. In areas like downtown Northville many of the homes are Victorian style you would not want to put up a ranch in between two Victorians.
14. Non Functional Floor PlanFloor plans that make living in the home difficult will turn away buyers. Excessive stairs between rooms, rooms that are out of proportion, poor access to the backyard, low ceilings, few windows, and other layout issues will result in a re-sale problem. This may be an opportunity to take down walls, add windows and doors, and make creative changes to improve the functionality and value of a house. Design skill and a fairly high budget will be necessary. Some examples are: Having to get to one bedroom through another bedroom, having only one bathroom in the bedroom.15. Costly Improvements The cost of certain improvements may be hard to recoup. Some examples may be imported fixtures, unusual craftsmanship, exotic woods, European appliances, non-native plants, hand decorated walls, etc. If these finishes are similar to locally available materials, they may not have a market value equal to their cost. In general many improvements will not get you dollar for dollar what you put into it. (ie. swimming pools do not contribute the much of their cost in the value of the home. In fact it may be a negative to some people)
16. Out Dated FinishesMost homes have some outdated finishes - from needing freshening up, to a complete makeover. This is where design skill and perseverance can completely transform a house. If you are new to remodeling, consider your budget carefully. Often the work can get quite extensive and tends to grow as the project develops. (ie. formica counter tops in homes over $250,000 is out where corian, SSV, and granite are in)17. Inspection IssuesExcessive repairs noted on your inspection report indicate that the house was not maintained or was poorly constructed. Be prepared for some serious work on the house. All exterior claddings, including stucco, should be inspected carefully. An incorrect application may have water damage or mold behind it. A mold infestation may be expensive to remove. Be prepared to document your repairs in order to show a future buyer that the problems have been completely solved. These issues tend to have some stigma attached.
18. Insurance ClaimsIn some areas a home may have higher insurance bills because of previous claims from the prior home owner. In Michigan I don't believe it is a factor. However in flood prone areas, hurrican areas it is important to know the facts about a previous insurance claim. If it was due to a fire or flooding problem, you should have full disclosure. Large insurance claims are a red flag, and may result in difficulty in obtaining insurance on the home. Many homes have had repairs covered by insurance, such as hail damage, and these are not a re-sale problem.
19. Over ImprovedHomes that are over improved for the area, or have excess acreage, often have a difficult time recouping the additional cost. Most people feel safer buying one of the cheaper houses in the neighborhood.
20. Commercial ViewHomes in suburban areas that view office buildings or retail centers are less attractive to buyers. Buyers choose suburban neighborhoods for their concentration of single family homes, separated from commercial areas. This may not be a problem in more urban areas.
21. No privacyMost buyers in all neighborhoods want a certain degree of privacy in the back yard. If the building behind your home looks down on your backyard or into your family room, this will be a sales objection. This can be mitigated by trees or screening.
Here are another 2 pages of what adds value to your home and what subtracts value from your home.
To search Michigan homes for sale
For more real estate and mortgage information go to www.russravary.com
