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But We Have Granite!

By
Real Estate Agent with Real Estate Marketplace - Louisville KY

How Do Upgrades Affect My Home's Value?

Granite CountertopsSo you're giving thought to placing your home For Sale on the market and it's time to size up the competition.  Looks rather simple..."we have hardwood floors, they don't...we back up to the woods and they have neighbors to look at from their deck...we don't have a fully fenced yard like they do, but we have granite counters and they don't. They're asking $310,000, so we should easily get $330,000 for ours." There, all done! Pricing a home...so easy, a caveman could do it (sorry Geico)!

Yep, this is where I rain on your parade. Not only is it not that simple...but it's failed logic! Even if the homes were identical with exception of the particulars mentioned above, it's still not going to work out quite so simple. There are two flaws in the above scenario:

  • Assuming that upgraded finishes automatically translates to a higher fair market value of your home
  • Basing a home's list price solely off of the other active listings in the neighborhood.

A local housing market such as Louisville's has the sales capacity to sustain healthy market conditions. For example, more than 1,000 homes went ‘under contract' in the Greater Louisville area in August 2010. As impressive as that statistic may be, we must also consider the more than 10,000 homes currently for sale in this market. So, we have a substantial amount of competition to consider when positioning a home to sell in Louisville.

Upgrades such as granite counters, hardwood floors & fully fenced yards do, without a doubt, add value to a home. However, this value typically serves to position your home ahead of like-homes comparable in size, construction & location. This added value won't necessarily warrant a higher list price...but should command in a higher sale price over those properties without, not to mention a quicker close to the sale! The quicker sale is where you will realize the financial reward of your upgraded finishes...through being able to move on to your new home and take advantage of these historically low interest rates!

If you are planning a move in the near future, you'll be in the buyer's shoes soon enough and this concept will become crystal clear to you. With such a rich selection of homes on today's market, there is no question that sellers today must make a compelling appeal to the buyer and ensure your home stands heads above the crowd!

Discover not only what your home is worth, but who's looking to buy your home now! Contact your Realtor in Louisville KY today via e-mail, or at (502) 641-9802, and set aside 45 minutes of your time for a full listing consultation. Communication is paramount, so all questions and concerns will be addressed to your satisfaction. Don't forget to visit The Louisville Drop for additional topics relevant to Louisville's homeowners!

Comments (5)

Joan Whitebook
BHG The Masiello Group - Nashua, NH
Consumer Focused Real Estate Services

This is a very good post and the message is very difficult to get across the the sellers.  I think taking sellers to the other homes can be a big plus as well.

Sep 20, 2010 02:05 PM
Brad Rachielles
CENTURY 21 Peak, Ca BRE# 01489453 - Upland, CA
REALTOR, CDPE, Upland, CA

Chris,

Well Done. This could be the start of several more posts with equal practical value. Best of success.

Sep 20, 2010 02:16 PM
Christa Borellini
Prudential California - San Diego, CA

Very good post!  It is so interesting that you can have the same clients as buyers...and then sellers and when they are sellers they suddenly forget how to think like buyers.

Sep 20, 2010 02:19 PM
Chris Dugger
Real Estate Marketplace - Louisville KY - Louisville, KY
Louisville REALTOR

Joan ~ I understand the difficulty because it took me a while to 'get it' myself. When I first started out, I thought it all added to extra $$.

Brad ~ I plan to devote at least one post to my outside blog each week to pricing a home. Mistakes in pricing are the most detrimental factor these days.

Christa ~ It's always difficult to put on the other hat...even for us sometimes. Until I put my own home on the market, I realized how infrequently I try to see the situation from my client's perspective. I'm glad to have developed some skill in helping sellers think like buyers and vice versa.

Sep 20, 2010 04:32 PM
Susan Haughton
Long and Foster REALTORS (703) 470-4545 - Alexandria, VA
Susan & Mindy Team...Honesty. Integrity. Results.

Good post with great advice for sellers;  it's a tough idea to get across sometimes, but I like your line about their understanding the concept once they become buyers.

Sep 23, 2010 03:32 PM