Raising the Roof - Ways to Maximize re-sale prices in a Hot market
A lot of the focus these days is on the enduring strength of demand among Canadian homebuyers. But even though newly-constructed houses make up a considerable chunk of that action, the resilient re-sale market means there are an awful lot of home sellers in the mix as well.
Despite the record prices for houses – new and otherwise – the fact is there are still some important guidelines for those who want to get top dollar for their property. But it doesn’t always entail spending a small fortune on renovation and re-decoration.
The expectation that you’ll recoup every cent you spend on your house couldn’t be more misplaced. The fact is, most houses have a resale value that’s determined principally by the neighborhood where they’re located. People looking in that area are looking for property in a certain range. And anyone trying to sell something that’s priced at 25 per cent or more than the neighbourhood average, aren’t likely to close a deal – even in a hot market.
The bottom line is always that no one wants the best house in an inferior area: it’s always the reverse because re-sale prices are enhanced in a superior 'hood.
Another consideration is the proximity of a re-sale home to newly-constructed ones. If you’re facing that sort of direct competition, don’t expect to recover as much from your renovation as you might in an area of exclusively similar-aged property.
That said, there’s no question that the wild popularity of home design television programs and magazines has generally raised the bar on purchaser expectations. Consumers are more familiar than ever with the latest trends and typically expect to see at least some of those elements present.
It’s doubly true when it comes to evidence of basic home maintenance like fresh paint, clean gutters, roofs in good repair and signs of routine upgrades to bathrooms, kitchens and basements.
One real danger is that homeowners go overboard customizing their castle, only to find that features like pools, spas and other such features can actually diminish the market value of a house. (Speaking personally, on a recent house hunt there were several examples where all you could consider was the additional cost of undoing several luxury features that went way over the top.
The top six features that generate the lowest payback, by the way, are landscaping (25 to 50 per cent of what was spent), interlocking pavement (25 to 50 per cent), building a fence (25 to 50 per cent), asphalt paving (25 to 50 per cent), swimming pool (10 to 40 per cent) and installing a skylight (10 to 25 per cent).
On the other hand, some of the top ways to spend money are on bathroom and kitchen renovations, interior and exterior painting, energy efficient features like a new furnace, constructing a garage, window and door replacement, building a deck, adding a fireplace and adding air conditioning.
A recent survey by Royal LePage indicated that Canadians considered it appropriate to spend about $2,000 to prepare a house for re-sale and 25 per cent were willing to fork over as much as $5,000.
But that said, there are plenty of small measures to “stage” or “fluff” a house for sale that cost considerably less.
The most evident steps are things like thorough cleaning, replacing all burnt-out bulbs to maximize a bright effect and eliminating clutter. The survey indicated that 90 per cent of us display our collected small appliances – toasters, toaster ovens, blenders, radios, coffee makers – in plain view on our counters. That obstructs the perception that there’s ample counter space and storage – both important considerations for a house hunter. (For men, 32 per cent rank storage space as the most important house feature compared to 54 per cent for women.
A general de-personalizing of a home is also considered important because, as soon as it’s listed for sale, it’s not all about you anymore. Prepare to put away a lot of family pictures and sentimental knick knacks to foster the impression that “I could live here.” It also creates an impression of greater space.
Equally important and inexpensive are such touches as fluffy, new towels, fresh flowers and careful attention to odors from pets, cooking or other sources. And if you can’t see past your own taste and habits, there’s now a burgeoning sector of “home stagers” who will help you for a fee.
In fact, they just may make your home so attractive; you won’t want to move at all.