There are many factors that could potentially reduce the value of your home. According to a recent article on MSN Money by Leah Culler, here are 8 potential deal breakers:
Threat to value: Could be high – in some cases, 50% or more
What are the three most important factors in determining a home’s value? You guessed it: location, location and location. Although you likely considered location when you bought or built your home, something may have changed since then: rezoning, an increase in crime or a new city dump. So what can you do? Well, that depends on what about your location is bringing down the value. If you have a view of the city dump, for instance, you can plant some privacy hedges to make it less of an issue. Play up your home’s strengths; make sure every interior and exterior detail is perfect and be patient.
2. Lack of updates
Threat to value: Low to medium; usually, at least 10%
When there’s an oversupply of homes, buyers can be picky — and they definitely are. Rather than seeing the potential in an outdated kitchen and bathroom, a buyer will just move on to another home that won’t require as much work and vision. Granite countertops, new appliances, and a modern kitchen and bathroom, will all help to increase value. For between $5,000 and $8,000, you can install those granite countertops, update the light fixtures and add fresh paint and carpet. You’ll likely get a return of $15,000 to $20,000 when it is time to sell.
3. Bad floor plan
Threat to value: Medium to high; up to 25%
Appraisers consider odd floor plans when appraising homes. Without easy access to upstairs and an open layout, appraisers classify this as a functional problem which can reduce an appraised value by as much as 25 per cent compared with similarly sized homes.
4. Major systems and structures
Threat to value: Medium to high; up to 20%
A buyer wants to be able to walk in and say, ‘I could move right in’. Major system and structure issues kill potential deals in high-end neighbourhoods. Have an inspection done before you list your house and fix the major things. A roof that needs to be replaced could knock 15 per cent off the value. A heating and air-conditioning system that needs repairs could cut the value by as much as 20 per cent, and an electrical-system problem is probably somewhere between eight per cent and 10 per cent.
5. No garage
Threat to value: Varies; usually about $5,000
A garage definitely adds value to a home, and the key is to have the right-size garage for the home and the neighbourhood. If you have a one-car garage in a 1,200-square-foot home in a starter neighbourhood, there’s a big premium for that, but if you have a one-car garage in a half-million-dollar home, that’s a functional problem. The added value for a garage varies greatly by neighbourhood, but a good rule of thumb is $5,000 per stall.
6. No fence
Threat to value: Low; 5% to 10%
Many potential buyers are looking for a home with a fence because they have pets or want their children to be able to play in the yard safely. When you look at standard appraisal forms, there is a premium paid for fences. Porches and decks also add value to homes because people like outdoor space.
Threat to value: Low to medium; up to 15%
A little mould under a sink could potentially kill contracts. Even if buyers could easily get rid of it, sometimes they just back out. If people have an allergy, they’re going to run. Possible problems also include cigarette smoke and pet dander. No matter how many times you clean your home, you can never really get rid of Fido.
8. Fit and polish
Threat to value: Low; 5% to 10%
How’s your curb appeal? Is your lawn mowed? Is there chipped or peeling paint on the outside of your home? This is a sure way to negatively affect the value of a home and turn a buyer off. Buyers wonder if sellers can’t take care of simple items like peeling paint, what will the rest of the house look like?
What about the inside of your home? Small things like a stain in the bathtub or a hole in the wall can stand out to buyers. These repairs may be inexpensive, but they can make all the difference when it’s time to sell. Make sure you’ve got good paint and carpet. Whatever you spend there is usually a good investment.