If you are considering selling your home, then, of course, you know that resale value matters. But unless you’re planning on staying in a home forever, considering resale value is just as important when you are purchasing a home too. Sure, cosmetic upgrades generally increase the value of your home, but only to a certain point. There are actually many other factors that play a bigger role than you may realize. These things are worth considering, even if you are just purchasing your first home because it can ensure that you are making a good investment. You may be able to change some of these factors, while others may be much more permanent or outside of your control. Curious what they are?
1. Location, Location, Location
Location matters…probably more than any other factor on this list. Why? Well, first of all, there is very little you can do to change where your home is located. Most of us aren’t about to pick up and move a house, so what you see is what you get. Factors like commute time, convenience, nearby shopping, safety, crime rate, and walkability can significantly impact the value of your property. This can change over time, so it is helpful to know any proposed or planned changes for an area if you are considering purchasing. Being informed can help you select an area that may be “up and coming” but also protect you from any potential reduction in value (i.e. if redistricting is planned or they’re proposing to expand the road that runs directly behind your chosen home).
2. School Zoning
Even if you don’t have kids in the school district, your potential buyers might. So, either way, it’s worth considering when you’re buying a home because it will absolutely impact your resale value. Homes in high demand school districts have a much more insulated resale value, even if the market dips, so they tend to be a more secure investment. The catch? You’ll pay a lot more money for the same features. If you’re on a tight budget, then sacrificing the school district is an easy way to get more for your money. Just know the same will happen when you sell. Your buyer pool will likely be smaller and resale value lower than a similar home in a high demand school district.
3. Neighborhood Comparables or “Comps”
As the saying goes, you don’t want to be the best house in the neighborhood. There’s a reason for that. Upgrades will improve your home value, but only up to a point. After that point, additional improvements have a diminishing rate of return (known in real estate as over improvement). Homes in your surrounding area can either help drive your property value up, or bring it down so they absolutely need to be considered whether you are buying or selling a home. While you can explore the neighborhood and get a good idea of the level of attention to the exterior of nearby homes, this is where your local real estate agent should come in. A real estate agent can run a comparative market analysis (CMA), and tell you exactly how much a home is worth, based on what is going on in the local market, updates, home features, and other variables. The CMA can help you price your home correctly for sale and protect you from overpaying when purchasing a home.
4. Age of Systems and Roof
A chef’s kitchen and luxury owner’s bath are generally high on many buyers’ lists, but do you know what also tends to top the list? The age of a home’s systems like the HVAC and condition of the roof. No one wants to purchase a home and immediately spend a lot of money to upgrade these systems or replace the roof. In fact, if either of these items is towards the end of their life, your return on investment in replacing them prior to sale is actually pretty high and may be worth considering. Deferred maintenance can deter potential buyers and cause your home to sell for significantly less than it might otherwise. Plus, if the roof is in really bad shape it can actually prevent the bank from issuing financing because of potential leaks and damage to the property.
5. Storage Space
Storage space is a really high priority for buyers. Most people generally have a lot of stuff so things like oversized closets, cabinet space, attics, and basements are a huge plus for some and a non-negotiable for others. Even for those that may be downsizing, functional accessible storage options are a must. Unfortunately, in many upgraded or “flipped” homes, storage is often sacrificed for a more open floor plan. Make sure you scope this out a home’s storage options to ensure you will have enough space.
6. Your Garage
Did you know that homes with a garage sell, on average, for more than $23,000 compared to homes without? Not only does a garage offer additional storage space but also a pretty significant convenience factor as well. Most buyers value a place to park their car safely and are willing to pay a premium for it.
7. Your Lot
While yard work might not be for everyone, the size, location, and function of a lot matter when it comes to resale value. Less desirable lots that back up to a busy road or aren’t usable due to a significant slope, a creek (especially if the lot is in a flood plain), or large retaining wall are big deterrents for potential buyers and will negatively impact your resale value. On the other hand, large, flat lots with ample space or a feeling of privacy generally sell for a premium.
8. The Home’s Layout
An unusual or choppy floor plan is a major deterrent for most home buyers. It generally costs a lot of money to change the layout of a home, and your potential buyers know that too. Homes with an open concept (but not necessarily a single room warehouse feel) generally offer the best resale value. The layout shouldn't just take into account common areas. Consider the locations of things like bedrooms too. Bedrooms not only have a closet but also a full bath close by, after all, do you want you or your guests to have to walk across the house or upstairs just to go use the restroom or shower?
9. Natural Light
No one wants to feel like they live in a dungeon. High levels of natural light not only make a space feel bigger but also inviting, bright, and airy. Consider the number and location of windows and any outside objects or structures that might block natural light. The good news is that you can fake it with brighter bulbs and a few other staging tips to make your home feel brighter and more welcoming.
10. Curb Appeal
I’ve said it before and I’ll say it again, first impressions matter. How your home looks when you first pull into the driveway matters. So, when it comes time to sell, a well-manicured lawn can be just as important as any interior remodel. Landscaped homes sell for an average of 6-7% more and even basic maintenance like standard lawn care, recovers, on 267% of the project cost at resale.
Considering these 10 factors will ensure you are the most informed about your resale value, whether you are planning on buying or selling a home.
Ready to sell your home? Check out the 6 things you must do to get your home ready.
In the process of purchasing? Check out the 16 questions to ask before buying a home.
Want more specific or individualized recommendations? I've got you covered there too. Book a free online buyer or seller's consultation by clicking here.