One of the more interesting aspects of being a homeowner is that you’re simultaneously focused on two different priorities. First off, you want to enjoy your home. So you choose a style you like, perform small renovations, and invest in home improvements that fit your lifestyle. But secondly, you’re focused on the next buyer. Any time you do something to your house or see something in your neighborhood, you’re thinking about how it will influence the resale value of your home.
While you’ll frequently hear people discuss the various things that have a positive impact on resale value, there isn’t always enough conversation related to the things that hurt resale value. But in order to provide you with a well-rounded view of the situation, we’re going to explore some of these latter factors.
Sometimes the biggest negative factors are outside of your control. When people are in the process of buying a house, they don’t just take individual properties into account. They’re also thinking about larger neighborhood features.
Yuqing Pan recently wrote an article for Realtor.com in which he calculated how much “drag” different neighborhood features had on home sale values. Some of the features that hurt values include: hospitals (3.2 percent drag), shooting ranges (3.7 percent drag), power plants (5.3 percent drag), funeral homes (6.5 percent drag), cemeteries (12.3 percent drag), homeless shelters (12.7 percent drag), high concentration of renters (13.8 percent drag), and strip clubs (14.7 percent drags). But want to know what drags home values down more than anything else? Bad schools.
“While a top-performing school is definitely a plus for your property value, a bad school is a complete, out-and-out disaster,” Pan explains. “A school where one teacher handles a class of 40 students with a slim graduation rate is usually an indicator of a deprived neighborhood. The median home price of ZIP codes with schools that receive a 1 to 3 rating (out of a possible 10) from GreatSchools.org is only $155,000.”
Do you have bad neighbors? Well, the same reason you’re looking to sell your home could be what drags down your home’s property value. While it won’t always be immediately obvious to prospective buyers, bad neighbors will turn good buyers away.
Some of the things prospective buyers dislike: poor landscaping, barking dogs, eccentric house colors and architecture, RV’s parked in the driveway, and trash in the yard.
Most people don’t want to live near people who have a criminal history, so it only makes sense that living in close proximity to a registered sex offender would drag down the value of your home. In fact, one study suggests that it lowers the average home value by 12 percent. That’s as much as $30,000 on a $250,000 property.
The good news is that most of that value will rebound as soon as the sex offender leaves the neighborhood. So, if you’re patient, you may not have much to worry about.
It’s easy to talk about external factors, but you have to consider that you could be what’s dragging down the value of your property with poor design choices.
While most design issues are cosmetic and can be fixed, the average buyer has a hard time seeing through things they don’t like. In today’s market, dated design trends like wallpaper, popcorn ceilings, wooden paneled walls, glass blocks in the bathroom, vertical blinds, and shag carpet will keep you from getting top dollar.
Does the architecture and/or layout of your home leave a lot to be desired? A home with extreme features or unique elements may have spoken to you when you purchased it, but it probably doesn’t speak to the masses.
While a couple free weekends and a little bit of elbow grease is all you need to modernize dated design elements, it’s a bit harder to address architectural flaws and strange floor plans. It can be done, though.
“The best way to overcome a bad layout is to accentuate the benefits of it,” real estate professional Christian Dunlap says. “This may require you to change the way you are currently using the room. For example, a bedroom with a door leading outside could be staged to make it appear as its own living quarters. Shotgun bedrooms could be presented as master suites with a sitting area attached. Upstairs bedrooms with stairs going through them might be ideal game rooms or family rooms.”
Sometimes you’ll need to bring in a pair of fresh eyes to help you address strange architecture and odd floor plans. Listen to what they have to say and don’t take their criticisms personally.
Interestingly enough, you may think you’re adding value to your home when you’re actually taking value away.
A swimming pool is a great example. Since you love swimming pools, you might assume everyone else does. But what you’ll discover is that a lot of people see pools as money pits and don’t want to buy properties that have them. And if you live in a colder climate, a pool may be seen as useless (or expensive to heat).
Another example is an extensive garden or intricate landscaping. For someone who doesn’t want to spend a bunch of time doing yard work, this is a major turnoff.
When it comes to selling your home, you want to make sure you’re working with a real estate expert who understands both micro and macro market trends. That means choosing a real estate agent who is local to your area and understand the intricacies of buying and selling within your neighborhood.
At Green Residential, we’ve been working in the Houston real estate market for more than 25 years. Over that time, our agents have developed a comprehensive understanding of this dynamic market and know how to help our clients maximize value in both hot and cold markets.
For more information on how we can help, please contact us at your earliest convenience.
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