If you’re hoping to increase your home’s value (above and beyond the cost of an upgrade itself), you should know that the upgrades you value might not be valuable to potential buyers. In fact, you may never recoup the full cost of some home improvements, and the primary offenders might surprise you!
What five common upgrades have the worst return on investment? Find out below.
1. Adding a pool
Pools can be hit-or-miss when it comes to added value. If you’re selling Orlando, FL, real estate, or you live in a warm climate where people are inclined to use a pool year-round, you’re more likely to get a favorable response from buyers. Often, however, the return is not enough to pay for the pool itself. Don’t forget that you’ll need to operate and maintain the pool, and this comes with a sizable extra cost. Ultimately, your likelihood of recouping the money you spent on maintenance, in addition to the installation costs, is pretty low.
Plus, adding a pool to your home could be a major turnoff to some buyers. Buyers with small children may be concerned about safety risks, those looking for a low-maintenance yard won’t want to deal with the hassle and upkeep of cleaning a pool, and buyers who are on a tight budget may not have the extra cash to deal with the added expense.
2. Highly custom design decisions
Your idea of a dream kitchen probably isn’t everyone’s idea of a dream kitchen. Unless you plan to stay in your house for many years to come, think twice about renovations that are too personalized. If you install a kitchen backsplash, you might recoup the cost, because the difference between “no backsplash” and “backsplash” is noticeable. But the specific type of tile might not matter to buyers – they could be just as happy with a simple ceramic tile as they would with an expensive Calacatta marble tile. Similarly, choosing a beveled countertop edge that’s complex and ornate, rather than a basic beveled edge, can turn off buyers whose tastes don’t align with yours.
In fact, these custom features may wind up costing you come listing time, as many buyers will factor in the money they’ll need to spend to change the house to suit their own tastes. If you’re going to upgrade your kitchen just for the sake of selling, stick with neutral, builder-grade design decisions.
3. Room conversions
Buyers will be looking to check certain boxes when they tour your home: For example, three bedrooms, two bathrooms, and a garage. Getting rid of these expected spaces (or altering them into something unusual) may harm your resale value. Every bedroom, for instance, is coveted space that can bump your listing up into the next bracket. Buyers are looking for a two-bedroom, three-bedroom, or four-or-more-bedroom home.
You might not need that extra room and dream of knocking down a wall to create a giant walk-in closet. Or perhaps you’d prefer to cover the walls with soundproof foam and convert it into a recording studio. Unfortunately, most buyers won’t share your interests. Instead, they prefer an extra bedroom for children or guests.
4. Incremental square footage gains
Sizable square footage gains – like finishing your dingy basement so it becomes an additional livable floor – can be a boon in buyers’ minds. But tiny, incremental changes may not give you much of a return on your investment. You may love your new sunroom, but it’s not likely to drastically increase your home’s overall value. Adding square footage in a way that doesn’t flow well with the floor plan can also backfire. Sure, a half bath on the first floor would be useful, but if buyers have to pass through the kitchen to get to it, the half bath loses some of its appeal.
No one wants to buy a mega-mansion on a block full of split-levels. When your upgrades feel overboard for your neighborhood, you alienate buyers on two fronts: Buyers who are drawn to your neighborhood won’t be able to afford your home, and buyers who can afford a home of your caliber will prefer to be in a ritzier area. Keep the “base level” of your neighborhood in mind. Tour some open houses on your block to see how your neighbors’ kitchens look before you invest a small fortune in granite countertops and high-end fixtures. Being a little nicer than the other houses around you can be a selling point, but being vastly more luxurious is not.
Pursue these home upgrades for your own enjoyment – but don’t trick yourself into believing you’ll more than recoup the cost of the improvement in the form of a much larger listing price when it comes time to sell. You can always opt for the projects that have the best potential to draw in a buyer instead!
What home upgrades have been worth it for you? Share your tips in the comments below!
It’s not uncommon for sellers to search for a new home while simultaneously hosting open houses to encourage buyers to make an offer on their current home. But while common, being both a buyer and a seller is difficult enough, and even more so when you’re trying to time a sale with the purchase of a new home. If your current home sells quickly, you might feel rushed into your next home purchase if you want to avoid a move into short-term housing while you continue your search.
While the prospect of paying two mortgages for your current home for sale in San Diego, CA, and a new property across the country may send shivers up your spine, there are some definite advantages to buying a house before selling your current home. Plus, if you take advantage of the protections in place for sellers who are also looking for a new home, there is little risk in purchasing a new home before your current home sale is complete.
Here are some considerations to help determine when to buy a house before selling your current one.
You enjoy knowing what’s ahead of you. If you’re the type of person who feels nervous leaping into the unknown, you may find you’re more emotionally equipped to part with your current home when you know you’ve got your next place lined up.
You have time to hold out for what you want. You won’t feel rushed into settling for a home that’s less than perfect just so you have somewhere to live (or because your friends are getting sick of your crashing in their guest room). You’ll be able to wait for the perfect house, whether it’s in the perfect neighborhood, has a perfect layout, or is the perfect price (or all three!).
You could still bring cash to the table. You may qualify for a bridge loan if your credit is good and you have enough equity in your current home. Bridge loans allow transitioning homeowners who haven’t yet sold their current home to access the money they need for a down payment on a new home.
You save on extra moving costs and hassle. If you sell your home before you buy the next one, you may wind up moving twice – first to temporary housing and then to your new home. If you buy first, you’ll need to move only once. If your temporary residence is small, like a studio apartment or a guest room in a friend’s house, you’ll also face storage fees for all your furnishings in limbo.
You have a safety net. Although it’s not as attractive to the sellers you’re buying from, an offer that’s contingent on the sale of your current home allows you to put your next house under contract while still giving yourself extra time to find a buyer for your current home. In theory, that’s the best of both worlds.
Your next home is too good to pass up. You’ve found your dream home, and the seller is extremely motivated. If you love the home so much that you know you’ll regret letting this opportunity pass you by, then it could be worth taking a leap.
How do you decide when to buy a house? Have you bought a new home before selling your current home? Share your experience in the comments below!
Celebrated actress Stockard Channing has listed her longtime home in the Hollywood Hills for $1.895 million, as first reported by Variety.
Channing, a Tony award winner known for playing Rizzo in the original film version of “Grease,” bought the sylvan retreat in 2003.
The 1950 home’s wide-open spaces and abundant windows lend a mid-century beach house feel, but with views into the bird’s nest level of surrounding trees and of Laurel Canyon below. The spacious living room offers a host of places to socialize – or just curl up by a window with a good manuscript.
French doors in the adjacent dining room and the kitchen open onto an expansive terrace surrounded by trees and views. Two light-filled bedrooms offer similarly spectacular views with their own glass doors, plus hardwood floors and built-in shelves.
Although Channing is equally sought-after for stage, film and television, her TV work – including her role as the feisty mother of Julianna Margulies’ character in “The Good Wife” – often films in New York. This year, she also stars as Elizabeth Taylor in “Elizabeth, Michael and Marlon,” a comedy about a supposed road trip Taylor took with Michael Jackson and Marlon Brando following 9/11.
As a result of our obsession with photos and visuals today, buyers make judgments of homes immediately. Many will do their first showing online, so if your photos turn them off, they may never step foot inside.
Sellers need to go to great lengths to get buyers in the door. If you can get them through, it’s the small (and often obvious) things that will keep them interested. Though it’s a home first and foremost, it’s also an investment. Make changes or alterations that could turn off a buyer, and you risk hurting your bottom line.
If you’re planning to put your house on the market, be aware of these 10 ways you might be turning off potential buyers.
1. Turn your garage into a family room.
A family room might be attractive – to a family. But if you’ve sacrificed the garage, the trade-off might be a turn-off, especially to people who don’t have kids or who live in dense urban areas, where parking is at a premium. Even in the suburbs, most people want a covered, secure place to park their cars.
Don’t forget that a garage often doubles as a storage location, housing everything from the lawn mower to excess paper towels and cleansers. If you go glam with your garage, you’re likely to force a buyer to look elsewhere.
2. Convert a bedroom into a something other than a bedroom.
Aside from location and price, one of the first things a buyer searches for is number of bedrooms. Why? Because it’s a fundamental requirement.
You might think that having a wine cellar with built-in refrigerators in your home will make it attractive to potential buyers because it was attractive to you. But that’s not for everyone.
And while it’s true many people work from home today, at least part of the time, that doesn’t mean they want a dedicated home office -especially one with built-in desks or bookcases they can’t easily remove.
If you must convert a bedroom into something else, make sure you can readily change it back into a bedroom when you go to sell. If you have lots of bedrooms, buyers might be more forgiving. But a buyer who needs three might see your custom home office as a turn-off.
3. Lay down carpet over hardwood floors.
People like hardwood floors. They look cleaner, add a design element, don’t show dirt as much, and consumers with allergies prefer them over carpets.
If you have gleaming hardwood floors, show them off. Let the buyer decide if she wants to cover them. It’s easier for her to purchase new carpeting of her choosing than to get past yours.
4. Install over-the-top light fixtures.
A beautiful chandelier can enliven a dining room. But it can also turn off buyers who prefer simpler, less ornate fixtures.
Did you fall in love with a dark light fixture on a trip to Casablanca? That’s great. And you should use it for your enjoyment. But when it comes time to sell, replace it with something more neutral.
Remember, you want to appeal to the masses when your home is for sale. You want to stand out from a crowded field of sellers – but in the right way.
5. Turn your kid’s room into a miniature theme park.
Little kids have big imaginations. They tend to love Disney characters, spaceships, and superheroes, and their parents are often all-too-willing to turn their rooms into fantasy caves.
But the more you transform a child’s bedroom into something resembling a Disneyland ride, the more you’ll turn off most potential buyers. Your buyer might have teenage children, and see the removal of wallpaper, paint or little-kid-inspired light fixtures as too much work.
If you can, neutralize the kids’ rooms before you go on the market.
6. Add an above-ground pool.
Does it get hot in the summer where you live? Wish you had a backyard pool, but can’t afford to have a “real” pool installed? Then you might be tempted to buy and set up an above-ground pool.
For most buyers, though, these pools are an eyesore. Also, an above-ground pool can leave a big dead spot of grass in your backyard – another eyesore.
If you must have it, consider dismantling it before going on the market. Of course, be sure you’re ready to sell, or you may be stuck without a place to cool off next summer.
7. Leave dirty dishes in the sink.
A kitchen full of dirty dishes is not only unattractive, but it sends a strong message to the buyer: You don’t care about your home.
If your home is for sale, buyers will be coming through, and you want to impress them. Would you keep dirty dishes in the sink for your in-laws or overnight guests? Probably not. Then why wouldn’t you clean up for your potential customers?
Putting your home up for sale, and keeping it on the market, is work. If you aren’t cut out for it, considering holding off until you are ready to clean up for the buyers.
8. Make buyers take off their shoes.
This turn-off cuts both ways. As an agent, I always hated being forced to take my shoes off in someone else’s home – until I sold my own. Not only was it inconvenient, but also I wasn’t happy about my socks picking up a random homeowner’s dirt, pet hair and dust.
Once I became a first-time home seller, and one with sparkling new hardwood floors and carpet, I couldn’t imagine allowing dirt and grime from the outside world to dirty up my floors.
So what’s the compromise? Shoe covers from a medical supply store. Buyers and agents don’t need to take off their shoes, simply cover them. It’s a win-win for everyone.
9. Smoke cigarettes in every room of your house – for years.
Over time, the smell of smoke permeates your home. It gets into the carpet, drapes, wood paneling – just about everywhere. And that’s a big turn-off to most buyers today.
Getting rid of the smoke smell can be a big job. If you’re a smoker, seriously consider how you want to present your home to the market. For a long-term smoke-filled home, it means painting, removing carpets, and doing lots of deep cleaning. If you don’t do it, don’t expect to get top dollar for your home.
10. Keep Fido’s bed and toys front and center.
Family pets bring a lot of joy to the home. But they don’t always bring the same joy to a prospective buyer. Dog’s toys, filled with saliva, dirt and dust, can be a sore both for the eyes and the nose.
If you have a pet, put a plan in place to move the food and water bowls as well as the toys and dog’s bed to a better location, like in the garage.
It’s your home – for now
Part of the joy of owning a home is that you can do whatever you want with it, to it, and in it. You should enjoy it. But if you want to sell it quickly and for top dollar down the road, try to picture how others might react to any renovations, additions or modifications you make.
The more specific you get – such as turning your kid’s room into a miniature castle – the harder it will be to sell your home later, and the less return on investment you’ll get. When considering changes to your home, always consider resale.
There’s a lot to be learned from your neighbor’s home sale. Let’s say you live in Texas – if the home down the street is comparable to yours in some basic ways (square footage, for example), it could give you a great sense of what Dallas home prices are really like in your neighborhood. But if the neighbors have put in some strategic upgrades – or even struggled to sell! – there are lessons to be learned there as well.
1. Be a nosy neighbor at open houses
If you’re friendly with your neighbors, you might be able to get the inside scoop by asking what kind of reactions they’ve been getting to their home. Or better yet, ask if you can attend their open house. Take note of the feedback you hear. For example, if you have the same outdated built-in kitchen desk as your neighbor (used for writing checks and holding a corded landline), you might want to start putting away your pennies now so that you can transform this feature into more coveted counter space with storage underneath (maybe even a wine fridge?). Or your neighbor might tell you that buyers are disappointed when they discover the enormous 1980s whirlpool tub taking up prime bathroom real estate. As long as you have a bathtub somewhere in the home, consider turning your own seldom-used supertub into a walk-in shower.
Another example: It probably comes as no surprise that everyone oohed and aahed over your neighbor’s outdoor living space. If you’re neglecting your deck or concrete pad, start thinking outdoor living room. Even doing little things, such as setting a lantern on a table beside a seating area or putting up a wall of potted plants to create an enclosure, can charm potential buyers.
2. How long should a home be on the market?
In a hot real estate market, a home could sell in a matter of days. In a more stagnant market, it could take as long as six months for a home to sell. It’s beneficial to know how long it takes for your neighbor’s house to sell, especially if their house is similar to yours. Al Cannistra, a Texas real estate agent, suggests you keep tabs on the following when looking at neighborhood comps:
Whether the house sold quickly or lingered.
The final sale price.
Whether the asking price was close to the selling price.
Whether there was a need to come way down on price after a long time on the market.
Whether urgency by the sellers led to a lower price (career move or financial distress).
How your neighbor’s home sale, regarding price and length of time on the market, compared with other nearby homes.
What sort of impression the real estate agent made.
One big takeaway from this list is to track the home until the deal is done instead of looking at the listing price and calling it a day. The more important number (by far) is what the house actually sold for, not its listing price. Anyone can set a home price; the key is getting that price. “That sold price cannot be considered a valid comp until after it closes,” says Bill Golden, an Atlanta, GA, real estate agent. “The closing info should be verified by either a professional [real estate agent] or by public record. Homeowners can sometimes inflate the value when boasting to their neighbors.”
3. How to time the real estate market
If your neighbor priced competitively and the house sold in a flash (within a couple of weeks after putting it on the market), it might be your time to sell too. But if you’re on the fence about selling, and it’s looking like a buyer’s market based on a lack of interest in your neighbor’s home and lots of competition, you might want to stay put awhile. “Your neighbor’s home can tell you a lot about how yours will sell,” says Daniel Blatman, a New York, NY-based broker with Douglas Elliman. “It can inform you about … perceived value, how active the market is, and how quickly your home might sell.”
4. Demographic trends can affect home sales
Neighborhoods sometimes take on a type of persona: young families, retirees, singles, etc. If you really want to dig in, check out some detailed demographic data through Trulia. For example, Trulia’s San Francisco, CA, real estate market overview reveals everything from the average commute time and type (5% commute by foot!) to which schools are best and where crime is a factor.
Once you understand the appeal of your neighborhood, you can target certain groups when you’re ready to sell. “Learning how the seller’s agent positioned the home is very important,” says Blatman. “It should be targeted toward a specific buyer.” After you get the 411 on your neighbor’s digs, you should have a pretty good idea of what you should and shouldn’t do when you’re ready to sell your house.
What have you learned from your neighbors’ home sales? Tell us in the comments!
Current mortgage rates for 30-year fixed mortgages rose this week, with the current rate borrowers were quoted on Zillow at 3.46 percent, down 1 basis point from last week.
The 30-year fixed mortgage rate hovered around 3.45 percent throughout the week before rising to the current rate.
“Last week, mortgage rates remained mostly flat in response to a relatively sedate week,” said Erin Lantz, vice president of mortgages at Zillow. “All eyes this week will be on Friday’s monthly jobs report. Forecasters are expecting a moderately strong report and disappointing data could push rates lower.”
Additionally, the 15-year fixed mortgage rate was 2.68 percent, and for 5/1 ARMs, the rate was 2.79 percent.
Check Zillow for mortgage rate trends and up-to-the-minute mortgage rates for your state, or use the mortgage calculator to calculate monthly payments at the current rates.
*The weekly mortgage rate chart illustrates the average 30-year fixed interest rate in six-hour intervals.
Home-buying and selling is stressful – and with industry acronyms and real estate terms flying at you from all directions, you may feel overwhelmed navigating your new real estate reality. Whether you’re a first-time homebuyer sifting through home for sale in Chicago, IL, or a seasoned investor, there’s always more to learn. Trulia’s quick guide to common real estate terms is a good place to start. Download the PDF here and find more helpful information in the articles below.