If there is one question real estate agents are asked over and over, it would be, "What do you think my house is worth?" For some sellers, they are actually asking for a legitimate estimate of a property's value. For others, they are testing the agent to see if that agent is in tune with their sense of value. What they're really asking is, "What is my house really worth?" And, the answer to that question is simple. Your house is worth whatever a buyer is willing to pay or whatever the market will demand.
What too many homeowners don't understand is that the market determines the value and not a long list of other things. Let me show you what may not determine a home's value:
- Landscaping. Good landscaping is definitely a plus, and it adds curb appeal to a house, but if the house is a dog inside, it doesn't matter how good the landscaping is outside. It's a plus, but it may not be plus dollars.
- A newly remodeled kitchen. Here again, a great up-to-date kitchen is a real plus for a home, but this is a tricky area. The idea that new granite counter-tops, solid wood cabinets and some awesome flooring will add big bucks to your home's value may be a myth. A complete kitchen remodel has an ROI of 62%. On average, a complete kitchen remodel can cost from $40,000 to $65,000. That's a ROI of $24,800 on a $40,000 investment or a $40,300 ROI on a $65,000 investment. If you put your money in the stock market and received those returns, would you consider that a good investment? In this case, you didn't generate a great deal of return considering the investment. And, beyond the dollars spent, your life was disrupted for weeks. If you want to completely remodel your kitchen, do it while you live there and enjoy it yourself.
- Memories don't increase your home's value. You raised your kids in the house, your dog is buried in the back yard, the trees you planted along the fence line are fully grown, and this is the place where some of your most valued memories live. That's great, but a buyer doesn't care, and it's not fair to add money to the price to pay for your memories. When you're gone, it's just a house. It's your presence there that makes it special, and if you're not there, it's just real estate. Hang on to the memories, and let go of the house.
- You've convinced yourself that your house is different from the other cookie-cutter homes on the same street. For some reason, yours is just better. Probably not. If the homes on your street are basically the same, yours is probably worth the comp sale price of the other homes. I had a listing years ago where the owners told me their house was the best house on the street. Yea! I was ready to be wowed. They told me that the homes were all different and the neighborhood was not one of those cookie-cutter neighborhoods. When I arrived, I passed a dozen homes that looked just like theirs. The house was exactly like every other house on the street and it was definitely a cookie-cutter neighborhood. But, my clients had convinced themselves that there house was better and different and worth a lot more. It wasn't any of those things.
This list could go on and on, but you get the point. A realistic look at a property is critical for a quick and profitable sale. Trust your Realtor. They do this everyday, and they should have their finger on the pulse of the local market.
Your house may be special to you, but remember, it's just real estate. Once you're gone, it's just a house. It's your presence that makes it special. Sell, buy and make new memories.