Information from the California Association of REALTORS® (C.A.R.) has prompted me to dust off this post from several years ago. Although the prices may be different, the concept is really valid for today. I think you will enjoy.
Brad Rachielles
A Man's Home Is His Castle.....
.... unless it becomes his ball and chain.
One of the significant benefits of home ownership is that you have the freedom to make changes to the home to suit your lifestyle... to a point. Here is where that point was reached and surpassed.
The Setting:
- A 1950s neighborhood full of 3 bedroom, one bath, 1200 Square Foot (plus or minus) bungalow homes on 7,000 to 8,000 S.Ft. builder's lots. Each has a one or two car garage at the back of the lot. There is apparent pride of ownership throughout the area, but they are not ostentatious. Prices range from $225,000 to $275,000.
The Cast:
- Joe the tradesman - He completed his apprenticeship and was good at his craft. Joe was a hard worker taking all the overtime he could get and had worked his way up in his company. Years back, Joe had been able to save his money and buy one of these bungalows... his first home.
- Bill the REALTOR(R)
The Scene:
- A REALTOR's Open House in this same 1950's neighborhood hosted by Bill.
Life is Good for Joe.
As the open house progressed, there was a lull in the action. Up drives Joe in his new SUV, he comes in, and meets Bill. After conversation and touring the home, Joe says that he wants to sell his home just a block away. Bill is all ears so asks a few questions. He learns that life has been very good for Joe and he wants to move to a bigger and better home. He feels that Bill should be able to sell his home in short order given all of the wonderful improvements that he has made since buying the home.
With great pride Joe rattles off a list of irresistible new features he has added like:
- A new Swimming pool with waterfalls and a separate Koi pond.
- Added a second bathroom (now the master) with imported marble and full surround showerheads plus a jet stream tub.
- All new high end windows - the best available.
- New plumbing with hot water recirculator..
- All new solid oak flooring.
- He had a landscaper totally redesign the front and back yards with exotic gardens - small... but very expensive.
- He had the septic system removed and he was now tied into the city sewers.
- The kitchen had been totally replaced and all new mosaic designs, granite and the best appliances that money could buy were installed.
- .... and the list went on.
He said "Life has been good. I was able to have what I wanted. I've spent over $150,000 on that house. Why, that house MUST BE WORTH AT LEAST $400,000 with all those goodies".
Back to the real world.
Obviously, Joe and Bill had serious discussions. Joe learned that a homes value is NOT ....
PURCHASE PRICE + Improvement A + Improvement B + C + D + E + ...
While certain improvements may be pleasing, you should do your homework to find out which improvements will actually add to the value of your home or will be only appreciated by you. Generally, paint on the inside and outside are good. Kitchen and bathroom remodels in line with current customs are good. A fireplace, patio or deck addition are often good. Swimming pools and exotic decor - not so good.
The Taj Mahal in a bungalow neighborhood was nice for Joe.....
.... unless it becomes his ball and chain.
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