Monday, November 26, 2012

What Is It Really Worth ?


Let me start off by saying it is YOUR choice what you offer, but you want to put in a strong offer, it requires research and analysis by your Realtor. This is why you must always work with a buyers broker, this is where you believing in there abilities and trust is important. 

A home is not always worth what it is listed for, but on the other hand if the listing Realtor is a reputable agent than the list price will normally be accurate to what the neighborhood and the home is worth.   A low offer is not always the way to go, make sure your offer is fair!

When pulling these comps your agent will try to get it as close to a match as possible but you will still need to tweak these comps accordingly.  Here are some key points to remember when your agent is going over these with you. 

NEW appliances have never been used, this means normally you will have the paperwork for the warranties, and they have been put in within 6 months of the home being listed.   

UPDATED appliances have been used by the current homeowner or tenant, these updates have been done usually within 5 - 8 years of the home being put on the market.  So that updated kitchen could already be 5 years old. 

For a home that is able to boast that it has been completely remodeled, with everything new can add value of anywhere from 8% - 10% compared to other homes that are simply updated.  

This is normally quite the debate, I could name many roads that I would consider main roads in a town but when a bank appraiser comes in will not agree, and therefore they will make no price adjustment. This is a time when trusting your Realtor and seeing the comparison is very important, especially if you are not from that specific area. 

Let me also say this, if a location does not work for you for any reason you should never feel pressured to still buy it from your Realtor, they should offer to show you homes in the same area away from your objection area.  Some examples of this can be homes that have busier traffic patterns, sumps, or simply the privacy aspect to your neighbors. 

This will be your home and you will be the one living there for the next 15 years not your Realtor. 

Let's say someone has a fully finished basement, with no CO, well unfortunately it is worth nothing, because it is not legal.  For an average size home, with a finished basement with proper permits, the value is surprisingly low they may only raise the value by $5000.  

If your looking in an area that does not have basements you can not reduce the price of the home because of it lacking a basement, because all of the comps do not have them either.  This is often a surprise to those who are looking to live closer to the water, most homes will only have crawl-spaces not basements, and there is no reduction that would be considered reasonable. 

The garage typically you will have atleast 1 in some cases 2, and in the rare occasions 3 or more. 

When this happens I call it "The man that was given a house", and I unfortunately have to break the news to them that yes I personally appreciate their 5 car garage, painted floors, and custom shelving, but that means nothing to the bank or a buyer it doesn't add anymore value than a nicely maintained 2 car garage. 

Unfortunately I wish I could put a value on what a feature is worth, but it is practically impossible.  Every feature will have its pros and cons to an individual buyer.   Some features will be worth alot to a buyer, and others will be a drawback. 

My best advice to home-owners is keep in line with your neighborhood when it comes to features.   Do not go overboard because you can not guarantee you can re-coup the investment you made adding features, but you can be sure that your home has similar characteristics as your competition does, so that buyers will be comparing apples to apples so to speak.   

For many home-owners their features are not added initially to keep up with the neighborhood, but because they were personal wants and needs for the individual.  If you choose to upgrade your home extensively more so than your neighborhood calls for,  I advise you to stay as conservative as possible because it could be helpful or hurtful in a home that has been updated, and is not able to be categorized as new. 

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