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Do You Want The Most Expensive House In The Neighborhood?

Several months ago I was approached by a potential seller who wanted me to take a tour of her house. This was a beautiful 3000 square feet Colonial home, top of the line construction, appliances, flooring, décor and landscaping; a house anyone would be proud to move into.

At the end of my visit the owner told me the price range she was expecting to list the house at. A day later I had an appointment to give my listing presentation. I made sure to feature all the positive things about the property, and there were a lot. Then it came to the point where I had to list the things I considered negatives.

The fact is my price range did not come close to hers. What could have gone wrong?

This was a beautiful home but like most properties there were negatives.

The house was in a neighborhood of older ranches and raised ranches half its size.
The house was very close to the street in an area where buyers are looking for privacy.
The location was close to the corner of two streets
A driveway for the house next door ran from the front to the back of the property.

This also made me think of another case a few year ago where a home owner decided to add a second floor to his house in a neighborhood of small ranches selling for around $200,000 yet this seller wanted $375,000 for his house of course it didn't sell.

So my point is: never over improve, be aware of the price range of the neighborhood, and be conscious about the placement of the house.

Failure to follow this rule will result in disappointment, but if you still want to have the most expensive house to impress the neighbors all I can say enjoy it because you will not get back your investment.

Posted by Jennifer Fivelsdal, Fishkill NY on 01/15/2007 06:47 PM

Comments (11)

real estate, dutchess real estate, location, jennifer fivelsdal, rhinebeck real estate, pricing, new york real estate

Originally posted at: Rhinebeck Living: Do You Want The Most Expensive House In The Neighborhood?

This post has been included in New York Information Dutchess County, NY Information Red Hook, NY Information

11 Comments on Do You Want The Most Expensive House In The Neighborhood?

JAN

2007

Jennifer, I have a friend that has had his house on the market now for several months and it is not selling mainly because the violated your first rule so now he is asking far more than he will be able to sell it for because he is trying to get his money back. Some people just don't seem to get the point that there is such a thing as over improving.

George, I really hate when I have to tell someone they over improved the property, it is especially difficult if it is friend. I wish your friend well.

Good point. One of the top reasons why homes don't sell is price. When I council sellers, we discuss how buyers choose properties. What the seller put into it or paid is definitely not one of the reasons.

JAN

2007

The probelm thzt causes over improvement is people don't look at their home as a pile of stick, bricks and mud. As they do improvements they need to ask if what they are doing adds market value. I have made many improvements that are for me. I am not over financed and I am not expecting my little quirks to gain me a great windfall. I n fact, I'll probably need to remove a few to sell.

Another issue that is shown in the photo is te older homes nearby. In many areas where developable land is becoming scarce, like in Norhtern Dutchess, this happens.

Rule 2 after Lcation is buy the worst house in the best neighborhgood and your investment will grow.

Great post.

Dee: That information upfront is very important, the seller need to look at things from the buyer's point of view.

John: I like your idea about buying the worst house and then making the improvement.

We've heard it a million times--it's all about the location. Not only do people often make the mistake of overimproving compared to other houses in the neighborhood, they also make the mistake of thinking that the amount of investment into improvements is equal to the amount of value added to the home upon completion.

Brett: you are so right, I think this will be an ongoing issues realtors will have to face.

JAN

2007

Jennifer,

Thanks for the post. I suspect we will be seeing a lot of pink elephants for sale. Especially since a lot of people decided to improve and add on, rather than pay the high price to move. The over improvements will give them sense of accomplishment and comfort while they are living in the property. The headache will come when they want to sell!

Bill: That is so true.

JUN

2007

Jennifer this is such an important point to consider when remodeling or even buying the biggest house. That is where we can help our clients by advising them against buying the biggest and the best or at least make sure they understand the issue.

Ashley this is a concept some can't grasp. I usually tell some potential sellers to enjoy certain features because it will not add monetary value.

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