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Tuesday, October 20, 2015

Updating, Maintenance and Over Improvements: Know Which is Which When Selling Your Home

Buyers should know when they purchase a house there will be future costs in addition to payments and taxes.  These added costs can include updates, maintenance and over improvements. 

These are not all the same thing although many sellers consider them all equal (as in recoup this added value when selling).

Maintenance includes those items that must be addressed regardless of whether selling today or ever.  These include areas like roof replacement and the air conditioner.   These have to be addressed.

Will the costs be recovered when selling?  Maybe not all the cost.  But buyers will expect a house with a good roof and, in Florida, efficient air conditioning.

I just read an MLS entry this morning with phrases like "fresh paint."  Will the cost of the paint be recouped?   Who knows but if the house is move in ready with neutral paint an offer may come more quickly.  And if one sells a month sooner and saves the carrying cost (mortgage, insurance, association fees, etc.) for a month the cost may be recouped. 

Here in Florida a common question that comes up is whether or not adding a pool will increase the value of a house.   And, if installed, will the pool cost be recouped?

I always respond the same way:  Add a pool if you are going to use the pool.  While the selling price may be higher it is doubtful a buyer will place as much value on the pool as the seller.

It is all about quality of life.  It is about the lifestyle one is trying to create.

What about adding another room or two to increase the size of your home?  Having the largest home in the neighborhood may provide for a higher quality of life but adding on beyond the range of norms for the neighborhood may be considered an over improvement .

I have heard many times that you never want to buy the largest home in a neighborhood.  The reason seems pretty logical.  A large home will pull up the value of the smaller homes but a smaller home can easily pull down the larger property.   Over improvements almost always work against the seller.
Finally, one of the most often used words in MLS entries is "updated."   Buyers do want something that reflects current tastes.  I read something earlier today that advised prospective sellers to  "bring your home into today."

There are things buyers just don't want like popcorn ceilings, wood paneling or wallpaper.   Hint:  Take a look at the two most important rooms in your house - kitchens and bathrooms.

A word about what updating is not!  Updated does not mean ten or fifteen years ago.  That goes similarly for the update's cousin upgraded!  Upgraded many not mean anything if the upgraded item was installed at construction ten years ago.

In a nutshell this it when it comes to updating, maintenance and improvements to your home:   Home owners should not skip necessary maintenance items.  But, as to whether an improvement or addition is worth it, consider if it will enhance their quality of life.   Finally, over investing and later wanting to withdraw that investment when selling may not be in the cards. 

Ready to sell your Melbourne, Florida home?  Call or text me at 321-693-3850 for your free market analysis.

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