Sunday, June 14, 2015
Why Are So Many People Moving to Denver?
interesting article from blog.recolorado.com
Looking to move and buyer here? So are allot of people...
Denver metro attracts thousands of newcomers, but why?
According to 2014 U.S. Census, Denver Metro is welcoming 270,000 newcomers annually. And it’s no surprise - with a top ranked economy, consider these facts from the Denver Metro Chamber of Commerce:
It’s no wonder the out of state newcomer growth in the “Mile High” city is hitting new records! Denver Relocation Guide is the perfect tool for those out of state clients looking for information on neighborhoods, business, things to do, jobs and more!
•Colorado was the third-fastest growing state in 2013 (U.S. Census Bureau, 2014)
•The Denver-Aurora-Broomfield MSA ranked No. 2 for attracting college-educated workers from 2007-2012 (U.S. Census Bureau, 2014)
•Colorado ranks No. 1 for labor prospects (Forbes, 2014)
•Colorado is the nation’s second-most highly educated state for residents (37.8 percent) with a bachelor’s degree or higher (U.S. Census Bureau, 2014)
•In addition, Colorado has the nation’s lowest obesity rate and in No. 2 for physical activity (Trust for America’s Health, 2014; Kaiser State Health Facts, 2014)
•Median age is 36.6
•Average income is $56,514
However, it is truly Colorado’s extraordinary outdoor lifestyle that attracts newcomers. Nestled between the majestic Rocky Mountains to the west, and the High Plains to the east, residents and visitors alike are blessed with over 300 days of sunshine, a mild climate and diverse geography that presents a wide range of activities to enjoy.
With Denver as the starting point, Colorado is home to the Rockies’ 30 highest major summits, as well as four national parks, six national monuments, two national recreation areas, two national historic sites, three national historic trails, a national scenic trail, 11 national forests, two national grasslands, 41 national wilderness areas, two national conservation areas, eight national wildlife refuges, 44 state parks, a state forest, 323 state wildlife areas and numerous other scenic, historic and recreational attractions. Surrounding the city limits itself are many opportunities for enjoying the outdoors, such as golfing, skiing, camping, hiking, bicycling and fishing. Developers incorporate open space, trails and recreation in new communities which hold great appeal to a relocating family.
Looking to move and buyer here? So are allot of people...
Denver metro attracts thousands of newcomers, but why?
According to 2014 U.S. Census, Denver Metro is welcoming 270,000 newcomers annually. And it’s no surprise - with a top ranked economy, consider these facts from the Denver Metro Chamber of Commerce:
It’s no wonder the out of state newcomer growth in the “Mile High” city is hitting new records! Denver Relocation Guide is the perfect tool for those out of state clients looking for information on neighborhoods, business, things to do, jobs and more!
•Colorado was the third-fastest growing state in 2013 (U.S. Census Bureau, 2014)
•The Denver-Aurora-Broomfield MSA ranked No. 2 for attracting college-educated workers from 2007-2012 (U.S. Census Bureau, 2014)
•Colorado ranks No. 1 for labor prospects (Forbes, 2014)
•Colorado is the nation’s second-most highly educated state for residents (37.8 percent) with a bachelor’s degree or higher (U.S. Census Bureau, 2014)
•In addition, Colorado has the nation’s lowest obesity rate and in No. 2 for physical activity (Trust for America’s Health, 2014; Kaiser State Health Facts, 2014)
•Median age is 36.6
•Average income is $56,514
However, it is truly Colorado’s extraordinary outdoor lifestyle that attracts newcomers. Nestled between the majestic Rocky Mountains to the west, and the High Plains to the east, residents and visitors alike are blessed with over 300 days of sunshine, a mild climate and diverse geography that presents a wide range of activities to enjoy.
With Denver as the starting point, Colorado is home to the Rockies’ 30 highest major summits, as well as four national parks, six national monuments, two national recreation areas, two national historic sites, three national historic trails, a national scenic trail, 11 national forests, two national grasslands, 41 national wilderness areas, two national conservation areas, eight national wildlife refuges, 44 state parks, a state forest, 323 state wildlife areas and numerous other scenic, historic and recreational attractions. Surrounding the city limits itself are many opportunities for enjoying the outdoors, such as golfing, skiing, camping, hiking, bicycling and fishing. Developers incorporate open space, trails and recreation in new communities which hold great appeal to a relocating family.
Realtor.com: Now Is The Time to Buy
realtor.com and NAR says here are the benefits to buying now...
Purchasing a home right now could help potential buyers save more than $200,000 over the next 30 years, according to the inaugural Opportunity Cost Report released today by realtor.com. This report attempts to show in dollars and cents the cost of delaying purchasing a home in 382 housing markets throughout in the United States.
In compiling this report, Jonathan Smoke, chief economist for realtor.com® weighed many factors, including the long-term financial impact of owning versus renting, the amount estimated that renters will lose in waiting to buy, and the financial benefits of homeownership by market.
Interest rates, home prices, and the cost of rent are all predicted to go up throughout the year, which will impact the decision to delay purchasing a home, the report notes.
"Current market conditions give buyers the opportunity to build substantial wealth in the long-term, compared with renters and later buyers, in advance of the projected increase in mortgage rates and continuing price appreciation," says Smoke. "The problem is inventory is low, which has many would-be home buyers –especially first timers – standing on the sidelines and missing out on potentially material financial gains."
So what does this estimated long-term wealth gain really look like? Smoke reports that while some housing markets are more buyer-friendly than others, nationally the average buyer is set to gain $217,726 over a 30-year period based on today's dollars. Additionally, in 88 percent of metro areas, the financial benefit of buying a home right now accumulates at least $100,000 over 30 years.
"This analysis looks solely at the financial reasons to buy a home, based on assumptions about rising mortgage rates and changes in home values," says Smoke. "It's important to remember that a home purchase decision is deeply personal. Potential buyers need to consider factors such as upcoming life events, job security and potential relocation, in addition to financial benefits, because they too can have a significant impact on ownership."
These are the 10 markets with long-term wealth gains exceeding $500,000
1.Santa Cruz-Watsonville, Calif.: $1,006,413
2.Santa Rosa, Calif.: $883,068
3.San Jose-Sunnyvale-Santa Clara, Calif.: $782,144
4.Urban Honolulu, Hawaii: $714,748
5.Napa, Calif.: $712,192
6.Denver-Aurora-Lakewood, Colo.: $696,131
7.Salinas, Calif.: $553,158
8.San Diego-Carlsbad, Calif.: $518,382
9.San Luis Obispo-Paso Robles-Arroyo Grande, Calif.: $510,719
10.Fairbanks, Alaska.: $507,368
Purchasing a home right now could help potential buyers save more than $200,000 over the next 30 years, according to the inaugural Opportunity Cost Report released today by realtor.com. This report attempts to show in dollars and cents the cost of delaying purchasing a home in 382 housing markets throughout in the United States.
In compiling this report, Jonathan Smoke, chief economist for realtor.com® weighed many factors, including the long-term financial impact of owning versus renting, the amount estimated that renters will lose in waiting to buy, and the financial benefits of homeownership by market.
Interest rates, home prices, and the cost of rent are all predicted to go up throughout the year, which will impact the decision to delay purchasing a home, the report notes.
"Current market conditions give buyers the opportunity to build substantial wealth in the long-term, compared with renters and later buyers, in advance of the projected increase in mortgage rates and continuing price appreciation," says Smoke. "The problem is inventory is low, which has many would-be home buyers –especially first timers – standing on the sidelines and missing out on potentially material financial gains."
So what does this estimated long-term wealth gain really look like? Smoke reports that while some housing markets are more buyer-friendly than others, nationally the average buyer is set to gain $217,726 over a 30-year period based on today's dollars. Additionally, in 88 percent of metro areas, the financial benefit of buying a home right now accumulates at least $100,000 over 30 years.
"This analysis looks solely at the financial reasons to buy a home, based on assumptions about rising mortgage rates and changes in home values," says Smoke. "It's important to remember that a home purchase decision is deeply personal. Potential buyers need to consider factors such as upcoming life events, job security and potential relocation, in addition to financial benefits, because they too can have a significant impact on ownership."
These are the 10 markets with long-term wealth gains exceeding $500,000
1.Santa Cruz-Watsonville, Calif.: $1,006,413
2.Santa Rosa, Calif.: $883,068
3.San Jose-Sunnyvale-Santa Clara, Calif.: $782,144
4.Urban Honolulu, Hawaii: $714,748
5.Napa, Calif.: $712,192
6.Denver-Aurora-Lakewood, Colo.: $696,131
7.Salinas, Calif.: $553,158
8.San Diego-Carlsbad, Calif.: $518,382
9.San Luis Obispo-Paso Robles-Arroyo Grande, Calif.: $510,719
10.Fairbanks, Alaska.: $507,368
NAR: 'Marginal Agents' Biggest Threat to Industry
recent statement from the national association of realtors, moral of the story, work with an experienced agent....
The chief threat to REALTORS® today is other agents, according to the National Association of REALTORS®' newly released "Danger Report." Masses of marginal agents "are threatening the industry - that is, unskilled salespeople who lack the experience to coach buyers and sellers. The threat falls ahead of other pressing issues such as declining commissions, dwindling relevance, or a repeat housing crisis.The real estate industry is saddled with a large number of part-time, untrained, unethical and/or incompetent agents," according to NAR's report. "This knowledge gap threatens the credibility of the industry."
The chief threat to REALTORS® today is other agents, according to the National Association of REALTORS®' newly released "Danger Report." Masses of marginal agents "are threatening the industry - that is, unskilled salespeople who lack the experience to coach buyers and sellers. The threat falls ahead of other pressing issues such as declining commissions, dwindling relevance, or a repeat housing crisis.The real estate industry is saddled with a large number of part-time, untrained, unethical and/or incompetent agents," according to NAR's report. "This knowledge gap threatens the credibility of the industry."
Hidden pitfalls that can kill your home price
another interesting article from 24/7 Wall Street
24/7 Wall St. analyzed several of the pitfalls owners should know about and that meticulous buyers can discover.
All states have mandatory disclosure laws that require home sellers to disclose any material property defect. In some cases, the sellers may not be aware of a defect they have lived with for years and are not trying to hide the issues. There may be problems that existed before the current owner bought the home or that were added inadvertently as a property was altered. Failing to disclose these can lead to lawsuits when the defects are eventually found. Material defects regulations can vary from state to state, which can further complicate the process of purchasing of a new home.
Most home buyers and home sellers are likely to pay the few hundred dollars for a home inspection, which can save both parties money and grief later. This is particularly true for older homes. Still, even good house inspectors have limits to what they can inspect. Often, they are unable to check inside or under the structure and are restricted to what they can see or reach. Not many buyers or sellers opt for a more thorough inspection, which is much more expensive and time-consuming.
Material defects in a house that can affect the sale price substantially, or even be deal breakers. They often involve water issues such as old pipes, as well as hazardous materials and structural problems, but are hardly limited to that
When asked to name some of the problems, a home inspector might or might not find on a property that could cause a buyer to refuse to go through with the purchase, Frank Lesh, executive director at the American Society of Home Inspectors (ASHI), said, "A severe structural problem. For example, leaning or cracked foundation, excessive mold, or water damage."
Nick Gromicko, founder of the International Association of Certified Home Inspectors (InterNACHI) told 24/7 Wall St. that about one-quarter of the home inspection industry is related to testing for mold because it can cause such serious health problems. "Mold is a health issue which many young families wish to avoid. There is sometimes a feeling that mold will never go away," added Lesh.
Here then are 5 problems that may make selling a house either more difficult or even impossible.
1. Mold
Black mold is a potential environmental problem that will scare off buyers quicker than just about any other problem. If the mold is not visible but dampness in the walls, floors, or ceilings is apparent, then mold of some kind is almost certainly growing. In most cases, getting rid of mold is far more costly than preventing moisture from attacking the lumber, sheetrock, ceiling tiles and other wood products that mold spores love. Some molds are toxic, and even those that are not may cause allergic reactions in some people.
A professional mold inspection gives the seller a signed report from before the house is listed for sale. Buyers may choose to conduct their own testing as well, but at least the seller has a better chance of completing a sale with a satisfactory mold report. However, unlike leaded paint, there are no federal regulations for mold inspections or remediation. In 2012, Virginia rescinded legislation regulating licensing for mold inspection and remediation after just one year in effect due to the lack of federal standards.
2. Stigmatized property
Stigmatized properties belong to a broad category of houses and apartments that have been the scene of a suicide, murder, cult activity and so on, or that have been associated with other misfortunes or crimes — even ghosts. In most states, buyers are responsible to spot a stigmatized property. However, if a potential buyer asks about any stigmas attached to the property, home sellers are generally better off disclosing all they know about the property. While sellers may lose the sale if they disclose it all, they could end up in court if they don't. Regulations vary widely among states. In California, for example, state law requires disclosures of murders and suicides on the property and any death within the past three years, except in the case of AIDS-related deaths. But Tennessee, Colorado, Pennsylvania and many others have no such requirement at all.
A study of 100 stigmatized homes in 2000 indicated that stigmatized homes sold for an average of just 3% less than comparable listings but stayed on the market 45% longer. That is not always true, however. The condo where Nicole Simpson and Ron Goldman were murdered in 1994 sold for $200,000 less than the price Simpson paid for it. Some stigmatized properties have been demolished rather than put up for sale, or demolished and reappeared as a new house with a different address at the same location. But nothing compares with the danger of buying a former meth house, Nick Gromicko of InterNACHI pointed out. It makes people sick and if a later inspection finds that the house was used as a meth lab, the house is usually destroyed.
While a radon test costs about $150 and remediation costs about $1,000, Gromicko explained, a test for meth costs about $450 but could save the buyer the entire price of the house or tens of thousands of dollars in remediation costs.
What about a crazy neighbor? The National Association of Realtors has cited a case in Texas where the sellers were forced to repurchase the house they had sold because they failed to disclose that the next-door neighbor often left her house naked and cursing loudly.
Gromicko told us that undesirable neighbors are the biggest problem for potential home buyers. Sellers are under no disclosure obligation regarding who the neighbors are or how they behave. This is one area where caveat emptor really matters.
Finally, ghosts. In a survey conducted by the National Association of Realtors, more than 60% of respondents to a survey would consider buying a haunted house. The same survey indicated that about 40% of prospective buyers for a haunted house expect to get a discount of up to 30% from the asking price.
MORE: Best Markets to Flip a Home
3. Polybutylene piping
Millions of U.S. houses built between 1978 and 1995 in all parts of the country used polybutylene piping for the plumbing system. The piping reacts with oxidants in the water, causing the pipes to degrade and, ultimately, leak. Because the water pipe deteriorates from the inside, discovering the defect is often problematic. The problem is apparently worst in treated public water systems. The damage to a house can be severe. If the house has polybutylene pipes, it is not a matter of whether they will fail but of when, according to home listing service Propex.com. If the sellers know of the polybutylene piping, they should disclose the information and be prepared to either fix the plumbing before selling the house, discount the house at least enough to cover the cost, or change their plans to sell the house.
4. Well and septic systems
A septic system treats household sewage on properties not connected to a public sewer system, and a well is a private water source for the property. Septic systems and wells are common in rural areas and can be safe and effective for years if well-maintained. However, a failure in any part of the septic system or a well that runs dry can be expensive to repair.
Because replacing a septic system can run into the thousands of dollars, potential buyers are likely to want to know how well the system works and whether it has been tested recently. The tank should not leak and the drainfield should not have any water puddled on top. Of course, any sewage odor is a sign that the system is not working properly. Replacing the drainfield can cost as much as $20,000, while replacing a leaking tank might cost as much as $2,000.
Many places also have regulations related to the proximity of a house's well to its septic tank or to the property line. These distances vary by state and probably even by county, but a general rule of thumb could be the 100-foot separation between a well and the septic system required by the Federal Housing Administration in order to get an FHA-approved loan to buy the house. The FHA also requires a minimum distance of 10 feet for the septic system from the property line.
MORE: Buying a House Causes More Anxiety Than Getting a Root Canal
5. Zoning
Issues related to zoning could play a role in any house sale. If the buyer wants to build an addition or tear down a part or all of the house and build something else, zoning regulations could kill a deal if such changes are not permitted. Zoning is a local issue, and in an incorporated city there are probably at least two zones — residential and commercial — and sometimes more.
For example, a house that exceeds current zoning ordinances usually got there before the rules were written and is called non-conforming. It cannot be enlarged without getting a variance, and getting a variance is not guaranteed. And that's not all. If the house is more than 50% destroyed by fire or some natural disaster, it cannot be replaced without a variance.
Local governments usually approve changes if the alterations do not change the footprint of the building — for example, adding a floor. Anyone buying a property anywhere should check the zoning to see what conforms and what is allowed. Many people assume they can make changes that are not permitted.
It also pays to check that fences and other improvements are inside the property line. Too often people build right to the setback lines and forget things like air conditioners that can stick out over a neighboring property.
It is also valuable for buyers to check the zoning of all surrounding properties and any variances they have received. In a rural location, for example, lack of zoning could be an issue. Just because someone has not built a pig farm next to your property does not mean they cannot do so.
Homeowner association and subdivision rules are some other regulations that homeowners need to consider. These rules are not established by government but by homeowners, and they can even include restrictions on the color you can paint your house.
24/7 Wall St. analyzed several of the pitfalls owners should know about and that meticulous buyers can discover.
All states have mandatory disclosure laws that require home sellers to disclose any material property defect. In some cases, the sellers may not be aware of a defect they have lived with for years and are not trying to hide the issues. There may be problems that existed before the current owner bought the home or that were added inadvertently as a property was altered. Failing to disclose these can lead to lawsuits when the defects are eventually found. Material defects regulations can vary from state to state, which can further complicate the process of purchasing of a new home.
Most home buyers and home sellers are likely to pay the few hundred dollars for a home inspection, which can save both parties money and grief later. This is particularly true for older homes. Still, even good house inspectors have limits to what they can inspect. Often, they are unable to check inside or under the structure and are restricted to what they can see or reach. Not many buyers or sellers opt for a more thorough inspection, which is much more expensive and time-consuming.
Material defects in a house that can affect the sale price substantially, or even be deal breakers. They often involve water issues such as old pipes, as well as hazardous materials and structural problems, but are hardly limited to that
When asked to name some of the problems, a home inspector might or might not find on a property that could cause a buyer to refuse to go through with the purchase, Frank Lesh, executive director at the American Society of Home Inspectors (ASHI), said, "A severe structural problem. For example, leaning or cracked foundation, excessive mold, or water damage."
Nick Gromicko, founder of the International Association of Certified Home Inspectors (InterNACHI) told 24/7 Wall St. that about one-quarter of the home inspection industry is related to testing for mold because it can cause such serious health problems. "Mold is a health issue which many young families wish to avoid. There is sometimes a feeling that mold will never go away," added Lesh.
Here then are 5 problems that may make selling a house either more difficult or even impossible.
1. Mold
Black mold is a potential environmental problem that will scare off buyers quicker than just about any other problem. If the mold is not visible but dampness in the walls, floors, or ceilings is apparent, then mold of some kind is almost certainly growing. In most cases, getting rid of mold is far more costly than preventing moisture from attacking the lumber, sheetrock, ceiling tiles and other wood products that mold spores love. Some molds are toxic, and even those that are not may cause allergic reactions in some people.
A professional mold inspection gives the seller a signed report from before the house is listed for sale. Buyers may choose to conduct their own testing as well, but at least the seller has a better chance of completing a sale with a satisfactory mold report. However, unlike leaded paint, there are no federal regulations for mold inspections or remediation. In 2012, Virginia rescinded legislation regulating licensing for mold inspection and remediation after just one year in effect due to the lack of federal standards.
2. Stigmatized property
Stigmatized properties belong to a broad category of houses and apartments that have been the scene of a suicide, murder, cult activity and so on, or that have been associated with other misfortunes or crimes — even ghosts. In most states, buyers are responsible to spot a stigmatized property. However, if a potential buyer asks about any stigmas attached to the property, home sellers are generally better off disclosing all they know about the property. While sellers may lose the sale if they disclose it all, they could end up in court if they don't. Regulations vary widely among states. In California, for example, state law requires disclosures of murders and suicides on the property and any death within the past three years, except in the case of AIDS-related deaths. But Tennessee, Colorado, Pennsylvania and many others have no such requirement at all.
A study of 100 stigmatized homes in 2000 indicated that stigmatized homes sold for an average of just 3% less than comparable listings but stayed on the market 45% longer. That is not always true, however. The condo where Nicole Simpson and Ron Goldman were murdered in 1994 sold for $200,000 less than the price Simpson paid for it. Some stigmatized properties have been demolished rather than put up for sale, or demolished and reappeared as a new house with a different address at the same location. But nothing compares with the danger of buying a former meth house, Nick Gromicko of InterNACHI pointed out. It makes people sick and if a later inspection finds that the house was used as a meth lab, the house is usually destroyed.
While a radon test costs about $150 and remediation costs about $1,000, Gromicko explained, a test for meth costs about $450 but could save the buyer the entire price of the house or tens of thousands of dollars in remediation costs.
What about a crazy neighbor? The National Association of Realtors has cited a case in Texas where the sellers were forced to repurchase the house they had sold because they failed to disclose that the next-door neighbor often left her house naked and cursing loudly.
Gromicko told us that undesirable neighbors are the biggest problem for potential home buyers. Sellers are under no disclosure obligation regarding who the neighbors are or how they behave. This is one area where caveat emptor really matters.
Finally, ghosts. In a survey conducted by the National Association of Realtors, more than 60% of respondents to a survey would consider buying a haunted house. The same survey indicated that about 40% of prospective buyers for a haunted house expect to get a discount of up to 30% from the asking price.
MORE: Best Markets to Flip a Home
3. Polybutylene piping
Millions of U.S. houses built between 1978 and 1995 in all parts of the country used polybutylene piping for the plumbing system. The piping reacts with oxidants in the water, causing the pipes to degrade and, ultimately, leak. Because the water pipe deteriorates from the inside, discovering the defect is often problematic. The problem is apparently worst in treated public water systems. The damage to a house can be severe. If the house has polybutylene pipes, it is not a matter of whether they will fail but of when, according to home listing service Propex.com. If the sellers know of the polybutylene piping, they should disclose the information and be prepared to either fix the plumbing before selling the house, discount the house at least enough to cover the cost, or change their plans to sell the house.
4. Well and septic systems
A septic system treats household sewage on properties not connected to a public sewer system, and a well is a private water source for the property. Septic systems and wells are common in rural areas and can be safe and effective for years if well-maintained. However, a failure in any part of the septic system or a well that runs dry can be expensive to repair.
Because replacing a septic system can run into the thousands of dollars, potential buyers are likely to want to know how well the system works and whether it has been tested recently. The tank should not leak and the drainfield should not have any water puddled on top. Of course, any sewage odor is a sign that the system is not working properly. Replacing the drainfield can cost as much as $20,000, while replacing a leaking tank might cost as much as $2,000.
Many places also have regulations related to the proximity of a house's well to its septic tank or to the property line. These distances vary by state and probably even by county, but a general rule of thumb could be the 100-foot separation between a well and the septic system required by the Federal Housing Administration in order to get an FHA-approved loan to buy the house. The FHA also requires a minimum distance of 10 feet for the septic system from the property line.
MORE: Buying a House Causes More Anxiety Than Getting a Root Canal
5. Zoning
Issues related to zoning could play a role in any house sale. If the buyer wants to build an addition or tear down a part or all of the house and build something else, zoning regulations could kill a deal if such changes are not permitted. Zoning is a local issue, and in an incorporated city there are probably at least two zones — residential and commercial — and sometimes more.
For example, a house that exceeds current zoning ordinances usually got there before the rules were written and is called non-conforming. It cannot be enlarged without getting a variance, and getting a variance is not guaranteed. And that's not all. If the house is more than 50% destroyed by fire or some natural disaster, it cannot be replaced without a variance.
Local governments usually approve changes if the alterations do not change the footprint of the building — for example, adding a floor. Anyone buying a property anywhere should check the zoning to see what conforms and what is allowed. Many people assume they can make changes that are not permitted.
It also pays to check that fences and other improvements are inside the property line. Too often people build right to the setback lines and forget things like air conditioners that can stick out over a neighboring property.
It is also valuable for buyers to check the zoning of all surrounding properties and any variances they have received. In a rural location, for example, lack of zoning could be an issue. Just because someone has not built a pig farm next to your property does not mean they cannot do so.
Homeowner association and subdivision rules are some other regulations that homeowners need to consider. These rules are not established by government but by homeowners, and they can even include restrictions on the color you can paint your house.
5 Home Upgrades That Won’t Add Enough Value
interesting article from trulia.com
Just because you upgrade doesn’t necessarily mean you’ll profit.
Myth: All upgrades will add value to your home.
Fact: You may never recoup the full cost of some home upgrades.
If you’re hoping to increase your home’s value (above and beyond the cost of an upgrade itself), you should know that some updates that are valuable to you may not be valuable to potential buyers.
Here are five of the most common upgrades that cause homeowners to lose money
1. Putting in a pool
Pools can be hit-or-miss when it comes to added value. You may see some return, but often it’s not enough to pay for the pool itself.
In fact, 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.
If you live in a warm-weather climate where people are inclined to use a pool year-round, you’re more likely to get a favorable response from buyers.
If you’re looking to add a pool, don’t forget that you’ll need to operate and maintain the pool yourself, and this comes with a sizable extra cost. Your likelihood of recouping the money you spent on maintenance, in addition to the installation costs, is pretty low.
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. 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 for certain basic staples when they tour your home: typically, 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 likely 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.
5. Overimproving
No one wants to buy a megamansion 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 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 additional home value. You can always opt for the projects that have the best potential to draw in a buyer instead!
-
Just because you upgrade doesn’t necessarily mean you’ll profit.
Myth: All upgrades will add value to your home.
Fact: You may never recoup the full cost of some home upgrades.
If you’re hoping to increase your home’s value (above and beyond the cost of an upgrade itself), you should know that some updates that are valuable to you may not be valuable to potential buyers.
Here are five of the most common upgrades that cause homeowners to lose money
1. Putting in a pool
Pools can be hit-or-miss when it comes to added value. You may see some return, but often it’s not enough to pay for the pool itself.
In fact, 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.
If you live in a warm-weather climate where people are inclined to use a pool year-round, you’re more likely to get a favorable response from buyers.
If you’re looking to add a pool, don’t forget that you’ll need to operate and maintain the pool yourself, and this comes with a sizable extra cost. Your likelihood of recouping the money you spent on maintenance, in addition to the installation costs, is pretty low.
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. 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 for certain basic staples when they tour your home: typically, 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 likely 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.
5. Overimproving
No one wants to buy a megamansion 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 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 additional home value. You can always opt for the projects that have the best potential to draw in a buyer instead!
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