Scenario: The sale of new construction investment property about six(6) months from completion. Investor is a widow. Investor has a devoted daughter who happens to be a prize-winning architect. The daughter favors the benefits Healthy-Built Homes offer and the principles of smart growth, new urbanism, and green building. We had been searching for the "right" investment opportunity for our client and she had selected (4) homes as finalists ranging in price from the $130s to $180s similar to those seen here.
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Which property would she select? In the end, would it all come down to interiors and the ability of the builder to adapt not only to an improved design, but to a growing market demand ? That was the subject on the table and that's how it all was shaping up.
Subject: Interior Room Sizes
$180K Property. The Bedrooms are 8'6x9'4. You can not get a double bed and a dresser in these rooms. You need a minimum of 9' x 11' for a bedroom and that is still tight. $168K Property. The bedroom are 10x10 and 9x10 (generously measuring). Again too small, but better. you could actually get a bed and a dresser in the 10x10, you would just have to sit on the bed to open the dresser and you could only get the drawers open 18". $144 Property. The living area is 10'x12' and circulation is required through the space.You won't be able to fit a couch, coffee table, tv stand and have more then 24" for circulation. This will be very uncomfortable. $133K Property. Same challenges.
REALTOR ®Discovery ... Since our investor-client assumed that if the builder heard from
REALTORS® the down-side of tiny bedrooms, and tight quarters as well as the market demand for human scale, sustainable buildings, he might rethink room sizes, she requested we make a call to the builder. The conversation.
REALTOR ®"Hello, Mr. X, would you look at plans re-drawn "as a gift" from Ms. Y, our investor's famous architect-daughter? Would you consider some/all of her suggestions?
Builder: "Sure, I'll look at them, but I have the bank appraiser to consider, and those people seem just to care about how many bedrooms and baths I have," he tells us.
REALTOR ®"You know," we explained, " in our market (at least) our investor clients are looking for sustainable qualities There has been a huge increase in demand for such homes.
Total homes certified as of 02/26/07: 44
Total homes in progress as of 02/26/07: 375
VERY small bedrooms, washer & dryer in the pantry with the food, no storage for vacuums, could be a detriment to sales, and could easily be remedied at this point... Would you look at a few simple things you could do to make your buildings more attractive to our investor-clients?"
And how do you think he responded?
Insights:
•1) Simple solutions exist for the interior size and comfort issues.
•2) The solutions would require a do-able increase in cost to the builder.
•3) This has been estimated by the architect-daughter to be about $5K for the $175K property and $10K for the lower priced properties.
•4) This would bring popular "green" features including Low VOC paints, Non-toxic flooring, and generate the EnergyStar rating. An added bonus...Rooms happily also could accommodate people and their furniture, comfortably. Sounds good to me, how about you?
•5) Demand for such features will drive the market by 2010.
•6) More appraisers who understand the value-added features of "green" building will be in demand in the near future.
Hot Tip: Use insight in any real estate transaction and happy clients result.
Resources: Steps to Certify a Healthy-Built Home and a Healthy-Built Home Checklist
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