Number One Rule of Home Resale Value
Location. You hear agents repeat the phrase in triplicate: location, location, location. If you choose a home in a desirable location, odds are that location will remain in favor, which will always attract a larger pool of home buyers.
Alternatively, if the location is less than desirable, it's possible that your future sales price will always be less than the other homes around it, and you may attract a smaller pool of home buyers.
A few years ago I listed a home on a busy street in the Land Park neighborhood in Sacramento. It wasn't selling because the sellers had picked a sales price in line with comparable sales around the corner, on quieter streets. I asked why they ever bought this home. Because it was the cheapest home for sale in Land Park. We lowered the price to make it the least expensive home in Land Park, and it immediately sold.
Be careful that the characteristics of the neighborhood are not undergoing a change. I once bought home in Eden Prairie, Minnesota, that enjoyed pond frontage. If I had checked the city records, I would have known a major thoroughfare was in the works about a block away. Five years later, it was difficult to sell this home with cars zooming by at 60 MPH.
Basic Indicators of a Home With Good Resale Value
First, define the type of buyer who would purchase such a home. Then think about the type of home that kind of buyer would need. Does your home fit those parameters? Here are indicators of a home with good resale value:
- More than 2 bedrooms.
If almost every home in your neighborhood has only 2 bedrooms, owning a home with fewer than 3 bedrooms is most likely not a drawback. But it is a drawback if you're trying to attract, say, a couple. Many couples need a guest bedroom and an office, if not an office for each occupant. A home with 3 bedrooms or more is always a better choice to ensure future resale value.
- More than one bathroom.
Buyers will still buy a one-bath home but they expect to pay much less for it. Given a choice between a two-bath home versus a one-bath home, first-time home buyers will almost always opt for the two-bath home, even if the cost to install a second bath is much less than the price difference between the two homes.
Moreover, it's not enough to simply have two or more baths. A home without a master bath will suffer a lower resale value.
- Family space.
The term family is a bit misleading. A family space is any space in which a group of people can congregate. Whether to entertain friends or host a neighborhood gathering, buyers want an extra room that is spacious and informal. The days of the formal living room and parlors are over. Every space in a home today has a specific purpose and sometimes a dual purpose.
- Storage space and closets.
Don't ask me why, because it goes against my grain, but people in the 21st Century collect too much stuff. They've got to store it somewhere. Walk-in closets are almost an essential. Homes with small closets are hard to sell.
- One level.
When I was a kid in the 1950s, homes with 2-stories were more desirable but that trend has reversed itself. Even if the sacrifice is yard space, most buyers prefer a one-story home. Single levels are handicap accessible. However, in neighborhoods with a mix of two-story and one-story homes, don't buy a single-level home surrounded by multiple-story homes as those have a bad home resale value.
Unless you live in an urban area that relies mostly on public transportation, you need a place to park your car, preferably 2 parking spots. If it's a covered, enclosed area, all the better.
- Good flow, layout.
Few buyers want a chopped-up, closed-in space. Home buyers prefer natural light and open spaces, with a common sense flow that is interconnected without satellite rooms. A wing is acceptable; however, many families with young children do not want the master suite separated from the other bedrooms.
- Updates, remodeled.
Simple, do-it-yourself home improvements can greatly enhance a home's resale value. The two best rooms to remodel are the kitchen and baths. Home buyers prefer central heat and air, and some loans such as the energy efficient mortgage will provide for such updates upon purchase.
At the time of writing, Elizabeth Weintraub, DRE # 00697006, is a Broker-Associate at Lyon Real Estate in Sacramento, California.