Statistics say the average California homeowner moves to a new home about every five years. Much like marriage and gym membership, most of us go into the homeowner commitment believing it will be forever. But somewhere along the way, something happens to validate that five year prediction. The list of reasons is long. What, then, should a home buyer consider when they know there is a possibility they will be selling in the not-so-distant future?
Here are some tips for home buyers that will give you the best chance of selling when you need to and at the best price possible.
• Buy in the right location. There is only one thing that is most important about buying real estate, not three things. It's location. Nothing else.
• Buy access to betters schools and easy commutes to shopping and business centers - even if these things are not important to you right now. They might be important to a future buyer.
• Check with the city or county planning department regarding potential changes in zoning and land use. That chemical processing plant going in a couple blocks away could be a problem.
• Visit the neighborhood during various times of day - mornings, evenings, weekends. It's better to discover that the neighbor's kid has a garage band or that 101 Dalmatians can be heard barking all night before you buy.
• Don't buy a fixer. Most remodeling projects have a return on investment less than 60%. The general rule of thumb is: do projects you will like if you will be in the home over five years and do projects the next owner will like if you will be there less than five years. Since we're planning to sell in five years, play it safe.
• Buy a fixer. OK, if you find a fixer priced well below market and the numbers pencil out, go for it. Get estimates from licensed professionals before committing to the purchase. Also, don't take shortcuts on permits. Make sure you have them if required. Space added without permits can't be used to determine the appraised value when you sell. You may even receive a not-so-pleasant social call from the city or county during the project that could cost you a few bucks.
• Buy a property that fits the neighborhood and has sellable features. Futuristic space domes, log cabins, and houses that look like huge boulders have a very limited market. So do 3 bedroom/1bath homes compared to 3 bedroom/2 bath homes.
• Look at a lot of properties. You're basically looking for an investment property to live in, not a place to fall in love with. While even the most pure investment purchase has a hint of emotion in the final decision to buy, try to take emotion out of it and follow the criteria you have established for yourself when you started looking at properties. It may take time to find one that fits your needs, but be patient and stick to your plan.
There are things you can do during ownership to prepare well ahead of time for a sale, but we'll talk about those things another time.
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