Since it appears that the Real Estate market is beginning the process of some stabilization, now is probably a good time for a discussion on the subject of buying for resale. Although your first focus should be on finding a home that is a good match for your wants and needs today, it is the wise purchaser who does not forget that future wants and needs–and those of a buyer down the road–needs to be an important consideration.
When you buy a home there are but a few certainties–real estate taxes, homeowners’ insurance, and the fact that someday the home will need to be sold. The sale of your home may occur a few years or many years in the future, but sooner or later the home you buy will be back on the market. One of your major considerations then, when you BUY a home is an awareness of its eventual sale. A mistake made in the buying process is a potential time bomb that doesn’t get activated until resale time. And it can be a very expensive one.
Much of the consideration concerning resale has to do with the length of time you plan to be in the home. The shorter your expected ownership time, the more concerned you must be with resale factors. The longer your expected occupancy, the more leeway you will have with these factors (but only because normal price appreciation will ease the pain–amistake when you buy a home will still cost you money!)
To have a home that has good resale potential, you must consider a few traits common to homes that are easy to sell and avoid those that are often present in homes that are difficult to sell. In this scenario, more positive features equal to more potential buyers for the home. Homes with more negative features tend to eliminate potential buyers.
POSITIVE FEATURES: What Makes a House Easy To Sell
You’ve probably heard “location, location, location” in response to the question “what are the 3 most important factors in Real Estate?” Homes that fit this description are located not only in desirable (meaning well-kept and visually attractive) areas but also neighborhoods that are convenient to necessary services such as schools, shopping and employment centers. Being 40 miles from the city center may be just what you want, but future buyers may have little or no desire to deal with long commute times or having long distances to drive to reach needed services. In fact, many areas of the U.S. and Canada have seen trends back toward central city areas as buyers seek to avoid long hours behind the wheel.
In general, a neighborhood that has shown a history of stability over the years will usually be more desirable than those that have shown swings–either up or down–in desirability (and value). The “hot area” of today can quickly lose its appeal when buyers become fickle or decide that the premium in price to live there is just not worth it. Other areas can become desirable, then undesirable and back to desirable again, all in the matter of decade or less. When buying in these areas, you run the risk of getting caught trying to sell in a downward swing. You will likely do much better by purchasing in a more stable area.
You’ve probably heard this adage before, but it bears repeating: Buy homes that are priced at the median (or less) of the surrounding neighborhood. The average market value of the area will help to maintain your property value as well as make it more desirable to those buyers who have heard the same adage!
Often times, the easiest homes to sell are those that are very adaptable, since they will appeal to a wider range of potential buyers. For example, it is better to have a room in the home that would work as either a den/home office OR a bedroom rather than one that would only work for a single purpose. Space for future expansion, if needed, can also enhance a home’s appeal.
NEGATIVE FEATURES: What Makes a House Hard to Sell
Everyone wants to make their home as comfortable and appealing to their own tastes a possible, but it is easy to go overboard here. This applies both to style (which is almost impossible to correct at resale time) and decorating (which can be neutralized if you throw enough money at it). Here, moderation is best for future resale value.
Too large or too expensive for the area
A home that is “out of whack” with the surrounding neighborhood will almost always be difficult to sell. You may feel like the Lord of the Manor when you live there, but most buyers would prefer to buy in an area where the surrounding homes are more similar to their own.
Extra money spent for expensive amenities is rarely recouped, meaning that you will either have to sell the house for less money than you planned or, if you insist on getting a return
on your investment from the amenities, you will limit your potential market appreciably, since the home will likely be priced higher than those in will be in competition with.
Your desire to live “in the middle of nowhere” may be perfect for your needs, but consider the fact that the majority of buyers will prefer to live in a community rather than in isolation. Yes, there always WILL be a buyer who has the same tastes as you do, but locating them may be like finding a needle in YOUR haystack.
SUMMING UP. It is actually quite simple. What makes a good house to SELL almost always makes the best house to BUY.