Top Seven Factors that Eat Home Equity
Home sellers have seen their equity in their homes shrink over the past several years. If you are thinking about selling your home this spring, there are a few factors that you should address before your home goes on the market to make sure that you preserve as much of your remaining equity as possible.
1. Wallpaper: Wallpaper is a very personal decorative item. The chances that a potential buyer will like your wallpaper as much as you did when you picked it out are slim to none. All they are thinking about is the work required to strip the wallpaper off the walls and they are attaching a dollar amount to that effort. Do yourself a favor and remove it before they see it.
2. Pets: I love animals. I personally have three different forms of four-footed friends at my house. (OK, the horse lives outside my house but you get the point.) Even pet lovers are going to think about what damage your lovely pets may have done to your house and they are discounting the purchase price as a result. The best idea is to remove your pet(s) for any showings. I once heard the noted real estate and financial guru, Dave Ramsey, state that a cat in a house can turn out to be a $15,000 cat because that is how much a buyer might discount your home as a result of your feline friend. The best bet is to remove your pet(s) for any and all showings.
3. Clutter and Mess: A messy home makes people think that you have not been very diligent about maintaining your home. It also is a distraction when potential buyers are viewing your home. Keep your home pristine so that it is ready to show on a moment's notice. If you have too much stuff, pack up the excess and store it until your home sells. You need to move your stuff anyway so just think of this as "pre-packing."
4. Collections: The teacup collection that you inherited from your grandmother is charming. So is the beer stein collection you acquired during your travels across Europe. However, they add to the clutter in our home. See point #3.
5. Deferred Maintenance: All homes have something wrong with them. If you are someone who does not change the air filters regularly, or who has allowed the wear and tear to start to show on your home, fix these things now. Any indication that your home has not been treated with the utmost tender loving care will make a buyer make mental calculations that reduce the purchase price by a greater amount than would be required to just fix these minor items before putting your home on the market. If in doubt, hire a home inspector to help you come up with the list of items to fix.
6. Bad First Impression: Your home entrance is the first thing people see when entering your home. It is also a place that could have spider webs on the front lights, broken doorbell, and/or smudged or nicked front doors. If you have rusted lights, replace them. If the spiders have taken over, clean off the cobwebs. If your doorbells is broken, replace it. If your door is nicked and smudged, repaint it or replace it. And while you are doing that, put out a new welcome mat. This will make any potential buyer feel right at home.
7. Smells: "If it smells, it won't sell" is a common saying in real estate. However, I would add that anything will sell for the right price. Therefore, if your home smells of cigarette smoke, buyers will only consider it at a steep discount from what would be expected on a similiarly priced but non-aromatic home. The same applied to pet smells (see point 2) or food smells. Hold off on cooking your grandmother's recipe of garlic chicken until after you receive an offer on your home. If your home does have a distinct aroma, you may want to hire a professional to bring your home back to a neutral scent.
These seven factors are relatively inexpensive to address. However, if you ignore them, you might end up having a much smaller check at the closing table. The choice is up to you.
Top Ten Factors that Eat Home Equity
(c) Copyright 2012 Kathryn Maguire. All rights reserved.
Kathryn Maguire, MBA, GRI, ABR, SFR, and e-Pro
The Real Estate Group
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