19 potential resale problems does your home have one?
Yes they say buying a Metro Detroit home is a 90% an emotional purchase. However Metro Detroit home buyers are smart. They do consider other aspects of the home. That is what this page is all about, the 19 potential resale problems you may not have thought about. I want you to step back and take off your rose colored glasses. I want you to look at your home and see it in a buyers eyes.
However there are two sides of buying too - liking the home
As a metro Detroit real estate agent I see home buyers buy a home on "liking it" versus the "best value". Recently I saw a couple buy a Fenton waterfront home simply because they liked the kitchen. It made no sense for commuting to work, and there were better houses that they saw. But the kitchen sold them. I have seen people buy a home 450 square foot smaller home for the same price. The one they bought the one that had something that appealed to them. To them it was the right purchase. The best value, no it was not.
And reality
However, there will come a time when the buyer wants to re-sell the home. Years ago many areas were getting 3- 5% annual appreciation on the sales price. Now that has changed. It is more important to think about resale. Homes that have re-sale issues are going for a lot less money. It is time to consider any possible difficulties that you may encounter. The investment value of your home is directly related to its salability. If it is in demand by other buyers, your home will sell at the highest level possible for the market. What you think is a plus may be a negative to others. (ie. being right next door to the school was great for your kids, but may be a negative to an older couple with no kids)
The issues noted here are not necessarily deal killers. The home you would like to sell may have a few defects, yet meets the needs of a potential buyer in many ways. No home will be perfect. We just have to sell to the right buyer.
Investors and home flippers look for homes with marketability problems. They are often priced below market, and are perfect for their remodeling solutions. You, too, can think creatively when considering selling your home. Some problems can be corrected or mitigated. You may be able to make the design decisions and do the work yourself. Or, you may need to hire design and building help. Solving marketing problems adds to the marketability of your piece of Metro Detroit real estate. Remember, a home that appeals to the greatest number of buyers will sell quicker.
Here are 19 potential re-sale problems:
1. Unusual Easements or Restrictions
Sometimes a metro Detroit home has building restrictions due to an easement. You may not have full use of the property. If unusual easements or restrictions were not disclosed up front, you may not be aware of them until you see the survey and title work. If you discover these, I suggest that you take a step back, and consider whether you will accept an unusual easement or restriction on your use of the property. Some examples: neighbors may cross the property to get to common areas, or major utilities cross property.
2. Odd shaped yard or Lack of Yard
If a home has an odd shape such a reverse pie with no back yard your home may be harder to sell. It may be a beautiful home but it has an issue many buyers may not want. It may have less yard area than others in the neighborhood, for example - a home the back yard is a ravine or completely wooded. Home buyers with children tend to eliminate this choice. A steep slope may make the grounds difficult to use and maintain. Compare your property to the yards offered by competing Metro Detroit hoomes.
3. High Tension Wires & cell towers
The general reaction by buyers to high tension wires crossing near the lot is to simply eliminate the choice. Canton has subdivisions that have cell towers next too them. Not many people like buying homes looking out to towers. It reduces the number of buyers and your home will sit on the market longer.
4. Steep Driveway
I have had ladies say no way am I ever going to be able to back down this driveway. Here in Michigan people think about how they are going to get up and down the driveway in the snow. People are worried about backing off the side, hitting a tree, or sliding down the hill.
5. Main roads and Noisy, Busy Streets
Young parents with children are nervous about their children running out into the road. The noise related to a busy street is a turn-off to many buyers. They cannot sit outside on their deck or patio without hearing the noise. A home on a busy street can be worth worth 10 to 15% less than another home off the busy, noisy street.
6. Declining Values
Take Detroit for example. That is a city that will not appreciate as much as Novi. So where would you want to buy in? If you perceive the neighborhood to be declining, this is a must to avoid for home buyers. They choose areas that show pride in ownership. However, if your neighborhood has tear downs and new construction, then the neighborhood may be going through a renewal period, and may be a good risk.
7. High crime, child predators, or safety problems
If buyers sense that there are security problems - burglaries, drug trafficking, or safety problems for their children, they take a step back and look at the facts and data on these issues before buying. These kind of problems will turn away buyers fast.
8. Extended Marketing Time
Has your home been on the market a long time? In the market of 2007 that was normal, not so much now. Have you set your sales price too high? Has the market been slow? If it is on the market a long time because of a bad room layout, or close to a busy road you most likely will have the same problem. Or, is there a problem with the house that you will need to correct or can correct?
9. Rural or semi rural homes
In most cities, areas that are closer to downtown tend to have a larger buyer pool than homes located in rural or semi rural areas. Is your home hard to get to off the expressway. However, buyers may choose to trade the privacy and setting of a country home with the resale potential. If gas continues to go up will the house out of the city have a lower resale value. Or will traffic congestion make the commute to long?
10. No Recent Sold Homes or Comparable Sales
This indicates a possible re-sale problem. Your home may be very unusual compared to homes around it, or the market may be slow. Understand the underlying reason for few or no comparable sales. You don't want to be the largest home in the neighborhood, or the only log home, or the only contempory home.
11. Lacks a Typical Feature
In an area where nearly all Metro Detroit homes are on the golf course, or have a basement, or include a garage, buyers will tend to avoid homes that lack these exact same features. A slab home always sells for less than a home with a basement. Much less. In an area of mostly older buyers, a home with the main bedroom upstairs may have trouble selling. Look carefully at what is generally offered in a given area. Usually you want to buy a home with a basement.
12. Unusual Architecture
Homes that do not fit in to the neighborhood may have trouble selling. For example, the white contemporary style home may not be a good fit in a subdivision that has all red and brown brick colonial homes. In areas like downtown Milford or downtown Northville many of the homes are Victorian style you would not want to put up a ranch in between two Victorians.
13. Odd or Non Functional Floor Plans
Floor plans that are odd turn off home buyers. If they make living in the home difficult it will turn away buyers. Having to go through a bedroom to get to another room. Walking into a house right into the kitchen. Excessive step downs between rooms, rooms that are out of proportion, poor access to the backyard, low ceilings, few windows, and other layout issues will result in a re-sale problem. Yes you might have remodeled or made your home to fit you, but it may turn off certain buyers
14. Costly Improvements
The cost of certain home improvements may be hard to recover for home buyers. They may not have the money to do it. So they cannot coup. Some examples may be imported fixtures, unusual craftsmanship, exotic woods, European appliances, non-native plants, hand decorated walls, etc. If these finishes are similar to locally available materials, they may not have a market value equal to their cost. In general many improvements will not get you dollar for dollar what you put into it. (ie. swimming pools do not contribute the much of their cost in the value of the home. In fact it may be a negative to some people)
16. Out Dated Finishes
Most homes have some outdated finishes - from needing freshening up, to a complete makeover. This is where design skill and perseverance can completely transform a house. If you are new to remodeling, consider your budget carefully. Often the work can get quite extensive and tends to grow as the project develops. (ie. formica counter tops in homes over $250,000 is out where corian, SSV, and granite are in)
17. Inspection Issues
Excessive repairs noted on your inspection report indicate that the house was not maintained or was poorly constructed. Be prepared for some serious work on the house. All exterior claddings, including stucco, should be inspected carefully. An incorrect application may have water damage or mold behind it. A mold infestation may be expensive to remove. Be prepared to document your repairs in order to show a future buyer that the problems have been completely solved. These issues tend to have some stigma attached.
19. Over Improved
Homes that are over improved for the area, or have excess acreage, often have a difficult time recouping the additional cost. Most people feel safer buying one of the cheaper houses in the neighborhood.
20. Commercial View
Homes in suburban areas that view office buildings or retail centers are less attractive to buyers. Buyers choose suburban neighborhoods for their concentration of single family homes, separated from commercial areas. This may not be a problem in more urban areas.
21. No privacy
Most buyers in all neighborhoods want a certain degree of privacy in the back yard. If the building behind your home looks down on your backyard or into your family room, this will be a sales objection. This can be mitigated by trees or screening.
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