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Be Careful In Overimproving Your House

By Gary Woltal

Real Estate Agent with Keller Williams Realty 0575737

December 18, 2010 08:10 AM

When it comes to selling our homes I think every homeowner thinks it is worth more than market value. Even REALTOR'S homes. But market value is truly determined by BUYERS comparing yours with other comparables and those of your neighborhood. So be aware and

Be Careful In Overimproving Your House.

This goes for adding new pools, outdoor kitchens, fresh paint and carpet, new cabinetry and upgraded countertops, improved kitchens, insulated garage doors, painted garage floors, roof radiant barriers, updated bathrooms, a tool shed with electric, a deeper garage for a boat, higher end window treatments like plantation shutters, crown molding, higher end lighting fixtures, a stainless steel range or refrigerator.

The reality on MUCH of this great set of improvements you have added for YOU and your family's pleasure you often don't get full price of replacement difference back on sale, sometimes half, sometimes NOTHING. If you spent $15,000 on an outdoor kitchen or MORE but it is atypical of the neighborhood, that might be a FREEBIE the new buyer picks up along the way. This is not to be cruel, but improvements can be excessive compared to other like houses.

So most of the time do improvements for YOU, and the market will tell you what you recover in their cost at sale. It's just the way the world works!!

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Kate Elim

Dockside Realty - Spotsylvania, VA

Realtor 540-226-1964, Selling Homes & Land a

Hi Gary...Some things turn out to be fads also. Be careful what you add, unless as others have said, you plan to be there a long, long time. Also, give some serious thought to how much you really will benefit from the improvement or is something you are doing because the neighbor down the street did it.

Kate

P.S. Wow Gary! Two features in a row. And to think I can say I know you.

Dec 18, 2010 12:22 PM

Brad Rachielles

CENTURY 21 Peak, Ca BRE# 01489453 - Upland, CA

REALTOR, CDPE, Upland, CA

Brings back memories of my very first open house. Neighborhood was "1950s", 1200 to 1500 S.F. on 8000 S.F. lots, 3/1. A neighborhood visitor commented about his house after touring my property and asked what he could get for his home. he had added 1) a huge pool, expanded and remodeled the kitchen with granite, zero King and all of the top appliances. added two baths and remodeled the original with the very best marble. In all, he had added almost as much in improvements as the average cost of the surrounding properties. He was very indignant when I suggested that he wasn't going to get anywhere near his investment back.... especially in that neighborhood.

Dec 18, 2010 01:06 PM

Patricia Aulson

BERKSHIRE HATHAWAY HOME SERVICES Verani Realty NH Real Estate - Exeter, NH

Realtor - Portsmouth NH Homes-Hampton NH Homes

Great post as usual. I enjoyed the read and have bookmarked this for future re-blog.

Happy Holidays!

Patricia/Seacoast NH & ME

Dec 18, 2010 01:51 PM

Patricia Aulson

BERKSHIRE HATHAWAY HOME SERVICES Verani Realty NH Real Estate - Exeter, NH

Realtor - Portsmouth NH Homes-Hampton NH Homes

Great post as usual. I enjoyed the read and have bookmarked this for future re-blog.

Happy Holidays!

Patricia/Seacoast NH & ME

Dec 18, 2010 01:51 PM

Ron Wickes

Keller Williams - Broker Associate - Conroe, TX

If I could get my under improvers to over improve for them and my over improvers to under imporve for them life would be heaven!

Dec 18, 2010 01:55 PM

Jon Zolsky, Daytona Beach, FL

Daytona Condo Realty, 386-405-4408 - Daytona Beach, FL

Buy Daytona condos for heavenly good prices

Gary, true. Very often that can result in faster and easier sale , but not necessarily higher price

It can be called "with all other things equal, the nicer upgraded home sells first"

Dec 18, 2010 02:01 PM

Joan Whitebook

BHG The Masiello Group - Nashua, NH

Consumer Focused Real Estate Services

This is so true. Appraisers will not add any value for over improvements. It is sound advice, yet sellers don't want to face this reality.

Dec 18, 2010 02:03 PM

Larry Bettag

Cherry Creek Mortgage Illinois Residential Mortgage License LMB #0005759 Cherry Creek Mortgage NMLS #: 3001 - Saint Charles, IL

Vice-President of National Production

Gary....I get the "gold star" on this one! Great post. See it all the time. I'd over improve every day if I knew that I'd be in the house forever. Short of that....forget it!

Dec 18, 2010 02:28 PM

Dave Halpern

Dave Halpern Real Estate Agent, Inc., Louisville, KY (502) 664-7827 - Louisville, KY

Louisville Short Sale Expert

So true. Unique upgrades improve the owners quality of life but rarely increase market value.

Dec 18, 2010 02:34 PM

Sharon Parisi

United Real Estate Dallas - Dallas, TX

Dallas Homes

Gary, this is so true! Thanks for the reminder!

Dec 18, 2010 02:55 PM

Michelle Francis

Tim Francis Realty LLC - Atlanta, GA

Realtor, Buckhead Atlanta Homes for Sale & Lease

Gary,

Excellent advice. If you are planning to stay FOREVER do what you can afford and enjoy. Otherwise, it's a good idea to understand improvements on your home and the return on those improvements.

Especially in this economy, it's good to make sure you can get most of your money out of the improvements.

Dec 18, 2010 03:02 PM

Don Wixom

RE/MAX Executives Nampa, ID - Nampa, ID

"Looking out for your next move..."tm

Gary, right on! If a home owner plans to enjoy the improvement for themselves, it's fine. If they do it to get a return, there are much better investments!

Sometimes these improvements, however, may simply help the house sell, period. Without them, it might cause a drastic price reduction too.

Dec 18, 2010 04:18 PM

Chris Olsen

Olsen Ziegler Realty - Cleveland, OH

Broker Owner Cleveland Ohio Real Estate

Hi Gary -- So true. One really has to know what is selling and why, and what isn't selling and why not, and then see how the subject property compares and then flush out the options (cost-effectively).

Dec 18, 2010 04:20 PM

Bob & Leilani Souza

Souza Realty 916.408.5500 - Roseville, CA

Greater Sacramento Area Homes, Land & Investments

Gary, in this market, it seems like buyers will not pay that much more than the lowest comp they can find...even if that comp is for a real fixer-upper! Spending money on upgrades really should be for the homeowner's benefit and enjoyment and "if" it helps sell the home faster when it comes time to sell, all the better! :)

Leilani

P.S. If I was the buyer, I would definitely pay more money to have that outdoor kitchen...sighhhhh! :)

P.P.S. I'm re-blogging this post! :)

Dec 18, 2010 06:13 PM

MichelleCherie Carr Crowe .Just Call. 408-252-8900

Get Results Team...Just Call (408) 252-8900! . DRE #00901962 . Licensed to Sell since 1985 . Altas Realty - San Jose, CA

Family Helping Families Buy & Sell Homes 40+ Years

The question is: is it maintenance, an upgrade or a personalization?

Dec 18, 2010 09:08 PM

Claudette Millette

The Buyers' Counsel - Ashland, MA

Buyer, Broker - Metrowest Mass

Gary:

That is an amazing example of an over improvement in a home. No one would pay for that extravagant outdoor kitchen. But, it would be a fun thing to get for free...

Dec 19, 2010 12:19 AM

Li Read

Sea to Sky Premier Properties (Salt Spring) - Salt Spring Island, BC

Caring expertise...knowledge for you!

It is just the way the world works...thanks for the reminder to be prudent, if renovating for resale.

Dec 19, 2010 06:04 AM

Elizabeth Weintraub Sacramento Broker

Elizabeth Anne Weintraub, Broker - Sacramento, CA

Put 40 years of experience to work for you

I have some short sale sellers in the Sacramento area who took out a third equity loan to build an outdoor kitchen and put in a pool. They totally transformed the back yard. But after the bank gave them such a hard time on the short sale, they ripped out the entire outdoor kitchen and removed everything they could carry, except the pool. Now the back yard looks bare and lonely.

Dec 19, 2010 01:11 PM

Myrl Jeffcoat

Sacramento, CA

Greater Sacramento Realtor - Retired

Gary - I caught this blog as a reblog over on Bob and Leilani's Souza's blog. It hits on really valid points when it comes to overbuilding or over-improving for the neighborhood. But, I'd almost die to have THAT outdoor kitchen at my place. I'd want a more substantial roof over it however:-)

Dec 20, 2010 10:28 AM

Dub Walters

Real America - Newnan, GA

This is a great reminder for home sellers. I had to reblog.

Dec 21, 2010 02:46 AM