A few months ago an agent responded to blog I wrote about first time buyers. Her comment was that “First time buyers today don’t know what is good for them. They want their cake and ice cream before they’ve had their main meal. “ I wish I could remember the blogger’s name – but I forgot the post and only remember the quote. I had understood what she was saying, but at the time, felt the judgment was more than a little severe. However, recently I’ve recently had a cooperative for sale in a very lovely building and sometimes selling something small in a complex where everything is easily compared brings buyer behavior into sharper focus. Having observed the sales in that building – such as they are because volume was very low until just a few weeks ago – the agent is largely correct…wanting the glitz without the substance IS impacting the decision making process of first time buyers – and I predict that it will come back to haunt them when they sell.
The coop that I have listed is a very large 1 BR unit with a large bathroom and separate shower (unique for a pre-war building) It has high ceilings, wonderful moldings. The layout is nothing short of ideal. It is newly painted, the plaster has been repaired, the floors totally refinished and it sports a brand new bath. Great closet space wonderful views….but….but…its got a very dated kitchen. There are several other 1 BR units in the building and some of them have renovated kitchens and baths – while the listing I have has only a renovated bath.
For many first-time buyers – its all about bright and shiny things:
The bulk of buyers in the market for a 1 BR cooperative near the train station are first timers. These buyers are making a beeline for the units where everything is new, new, NEW!!! They want to be blown away and they certainly don’t want to lift a finger to deal with a kitchen or even painting in some cases. In my opinion, this is a mistake. Since everything else in the unit is up to snuff – I find this difficult to understand. The unit as it sits has better views, a better layout, better closet space, an eat-in kitchen (which most of the others don’t) and significantly more square footage. Yet people are willing to pay a premium for a smaller unit with less closet space as long as its all tricked out.
Although I understand that renovating a kitchen is a pretty big deal, and for some people it is out of the question, what I’m not getting is why no one is willing to put in one iota of elbow grease into as large of a purchase as a home - particularly in this economy. Elbow grease is instant equity. Its certainly way better than paying more for a home (or coop) with less square footage, poor layout and an inferior location just to get a nice kitchen. When you pay a premium for that type of home or unit just because it has a shiny new kitchen and ignore other factors you are leaving money on the table. After all – a dated kitchen CAN be changed. Just ask any contractor – they do it every day. But the location, square footage and layout are forever.
Cake & ice cream vs. meat and potatoes:
Issues like layout, square footage and location (or in the case of a condo or coop – the nature of the building) put a permanent ceiling on what you could ever hope to make when the time comes to sell the home. These issues are the meat and potatoes of real estate and the smart money knows that these issues should be first and foremost.
A new kitchen is the cake and ice cream – or really its the cherry on top of the sundae. It is nice to have but shouldn’t be the be-all and end-all of a transaction. The same goes for tumbled marble in the bathroom and master bath suites for those who are just starting out. Your first home is not going to be your last home. It is the first step in a process that will lead to the home of your dreams. Although you should really love your first house….it should be for the right reasons. Buyers who go after bright and shiny things pay a premium and often shoot themselves in the foot when it comes to resale. Accepting a home that is solid in the meat and potatoes department but may need some help in the cake and ice cream area is money in the bank. Because in the end, doing so allows you to have your cake and eat it.
© 2011 – Ruthmarie G. Hicks – http://thewestchesterview.com – All rights reserved.
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