A client recently asked, "What is the value of my home?" He went on to say, "I purchased the house for $309,000 in 2005, and since then I've made $18,540 in improvements. So it should be worth at least $327,540."
Our Denver real estate team explained to the homeowner that market value is not related to the original purchase price. It's related to the recent sales prices of similar homes in the neighborhood.
We also reviewed the home improvements made by our client. The house was 20 years old, and he had replaced the old windows. He also replaced the old laminate kitchen counter with a new laminate counter, because the old one was chipped. And he replaced the original water heater as well as the original carpet.
The homeowner, in other words, had simply maintained the home in functional condition, just as his neighbors had maintained their homes. His maintenance projects were necessary, not optional.
We examined the Denver real estate sales data for his neighborhood, and we found that six similar homes sold for $340,000-$355,000 during the 90 days prior to our market analysis. It's critical to look at the current market data; sales that are older than 90 days are too old to be considered accurate.
Ten similar properties were currently listed for sale in our client's neighborhood, priced $335,000 to $375,000. Our client wanted to know about the highest priced neighbor. Understandably, he wondered if his own home might be worth as much.
The house priced at $375,000 had been listed for over 8 months. We previewed the home and found that it sported a gourmet kitchen, far nicer than any other kitchen in the neighborhood. The homeowners had also installed a luxurious home theatre, unusual for that community. One bedroom was also painted a dark navy blue.
Unfortunately, unique and over-improved homes priced above neighboring properties do not sell for significantly higher prices. In fact, they tend to languish on the market, just as this one.
When you consider selling your home, hire a professional Realtor that takes a detailed look at the current market trends in your neighborhood. If you have made significant updates to your home, such as replacing the laminate counters with slab granite, and replacing the standard kitchen appliances with top-of-the-line models, your Realtor will know the "Return on Investment" that you can expect in your neighborhood. Together, you'll assess the facts about recent home sales, and you will understand your home's current value.
Finally, prepare your home for sale. Repair the little things that get forgotten, like the worn weatherstripping. When buyers see an exceptionally well-maintained home, they feel confident that it's a solid investment. Handsome homes that are priced accurately sell in every market.
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Kathie Shandro is an experienced Realtor in Denver, Colorado. Visit Denver-HomesForSale.com for Denver real estate listings and information about Denver's neighborhoods, like Stapleton real estate.
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