Would You Believe This?
It's a general notion that the more luxurious a house, the higher price you'll be able to fetch for it. However, in reality, this high-end customization may actually reduce the value of the house drastically. Ensure that the elements in your house are neutral in nature for a higher evaluation.
Did you think that the value of your property, or to be more specific, your house, only depends upon the area, number of bed and baths, and its location? While all these factors undoubtedly play a crucial role, they are not the only factors! When it comes to buying and selling, be it of any nature, most buyers think economically. While your house may seem ideal for fetching the perfect price from buyers, the buyers, on the other hand, are thinking on the lines of the additional costs they have to incur in terms of maintenance and renovation. Not only this, the evaluation and pricing also goes beyond the condition of the house, it is related to the 'neighboring conditions', as well.
Remember that when your real estate agent will get a prospective buyer to examine your house, he will not look, but scan the property. Anything from cheap fixtures to showcasing your satellite dish to remodeling your second garage to a gym, may cost you a lot of money. The following section discusses 10 among the many things that can reduce your house's market value.
Factors That Can Affect the Value of Your Home
1. Neighbors and neighborhood
If the view of the neighborhood consists of roughly painted or unpainted homes, people quarreling, and shouting randomly, then be assured that the buyer would either pass your offer, or reduce the price significantly. Most buyers also research and perhaps talk to the neighbors before making a decision. If it becomes evident that the person/family staying next door is completely anti-social or nasty, get ready to bear a loss. Also, if the house is near a noisy pub, or places of similar nature, the peace-loving buyers would not want to take your offer, at least not without "ticketing" you for it.
2. Absence of a reputed school
If the schools near your house aren't great, then be ready to let that hit your expected selling price. According to The Telegraph
, a bad Ofsted
report can take around £20,000 (USD 33,400) away from the average value of the property! While families with school-going children would want a house in a good school district, as investors, others would also prefer such areas more because of the appreciation in property value. Even if you have maintained your house in a top-notch manner, this factor may actually overpower that advantage. And sadly, there is nothing much you can do about it!
3. Paintwork of the house
There are two facets to this point: 1) If the paint is cracked, faded, or peeled and gives the house an old eerie feel; 2) If the colors used for painting are extremely flashy. While blue might be your color, it might not be everybody's taste, especially when it comes to a wall color. Be it in the interior or the exterior of the house, it is always advisable to go for neutral shades―white, cream, yellow. Buyers might reduce the price of the property looking at the tacky paint, considering that they'll have to get the entire place redone at their own expense.
4. Lousy DIY repairs
How many times have you tried to save some bills by undertaking a repair task? If you have some dirty-looking corners in the house, or perhaps cheap fixtures that you used for temporary relief, it would be best to get them redone by a professional if you don't wish to devalue your property by thousands of dollars. Just make sure that potential buyers don't come across a leakage, mold infestation, stained ceiling, or a broken plumbing. You might have adapted yourself to living with these do-it-yourself repairs, but trust us, the buyers wouldn't!
5. A high-end kitchen
The kitchen is often considered to be the most crucial factor when it comes to falling for a house. While a filthy and under-maintained kitchen space is a complete downer, note that, an overly done kitchen would also not be of much help. If you have customized your kitchen with great additions―multiple stoves, inbuilt grill, high-storage refrigerator, customized tiles and walls―note that an average buyer would not want to pay extra for all of these, especially, if he is not an avid cook. Also, a color scheme that appealed to you may not appeal to everyone.
6. A luxuriously customized bathroom
The bathroom shouldn't smell, look, or in any way display signs that it needs help! On the other hand, an overly done bathroom wouldn't be much appreciated either. Your high-end customization, may perhaps seem distasteful to buyers. The first thing that will strike them is that they'll have to get everything redone, which will cost them money. While those candle sconces and fancy curtains do make the bathroom look over-the-top, some buyers would not want anything more than shower curtains! Remember, anything that will cost the buyer, will decrease the value of the property.
8. A messy children's room
Believe it or not! According to The Telegraph
, who published this point based on a survey done by ING Direct
, a mortgage company, "... a messy child's room can create such a bad impression on would-be buyers that it will knock £8,000 (USD 12,800) off the value of a typical house." Talk about the impact of first impressions! And if it leads to a loss worth thousands of dollars, it's time to teach your kids how to keep their room spic-and-span, all the time!
9. The water elements
According to Forbes
, "A lot of buyers think that pools and other water features, such as a hot tub or a pond, are added expenses and extra maintenance required on the home." Although, a point to be noted is that this factor is subjective to the location of the house. For instance, a house with a swimming pool would be a double thumbs up when it comes to tropical places. However, if your location says rain and cold, well, these water elements would be considered absolutely unnecessary.
10. The smoke effect!
Last, but not the least, on the list is perhaps yet another side effect of smoking! Smoking can reduce the value of your house by 29%! A survey conducted by Pfizer Canada
, a biopharmaceutical company, wherein real estate agents from Ontario and Quebec participated, states, "With an average home in Ontario listed at CAD 369,000, that may mean a loss of up to CAD 107,010 for homeowners." The reason behind this is that the smell of the smoke tends to get absorbed in the walls, ceilings, carpets, and other elements of the house. Which means that the owners will have to get all these elements changed.
The property market is an extremely analytical one. While we construct a house based on our emotions and tastes, after going through the aforementioned points, you might have gauged that some of the "emotional" renovations may actually make you bear a loss. But this should not stop you from doing what you want to do with your house. If you love that swimming pool, by all means, keep it. If you love the gym in your house, don't stop from turning a spare room into one! Although just make sure that all these renovations are done only for emotional well-being, because, as observed, they might not serve you well, monetarily.