Friday, September 26, 2014

Return on your investment: Sellers expect it; Buyers ignore it.

Added value, return on investment.   These are the concepts home owners (eventual sellers) expect when they do something to their home.

I have been asked many times about how much a pool will add to the value of a home.  My response is always something like...put in a pool if you are going to use it.

While at a listing appointment recently I was impressed with the condition of the older home.  The seller had recently installed a new air conditioner ($7,000) and a new roof ($11,000).

These were necessary maintenance items.  These were necessary lifestyle accommodations - especially in Florida.

Prospective buyers will appreciate the new air conditioner.  They will find comfort in the recent roof replacement.

While I am doubtful buyers will give anywhere near the "full value" in their offer price this I feel confident about:
  • The selling price should be higher than a property with an older roof.
  • The selling price should be higher than the same property with an older, less energy efficient, air conditioner.

However, don't expect a full return on the investment

Your real estate agent will definitely promote these features in their marketing.  Prospective buyer's agents will make sure the features are brought to their client's attention.

Still, if you are looking for a dollar for dollar return on the "added value," don't.   And, while buyers expect home owners to maintain their home, these items will result in a higher selling price than a neglected property.

Rather than looking at any potential return on home maintenance I suggest homeowners consider this....Why are you considering doing these projects?

Likewise, consider the cost of deferred maintenance.

Ready to buy or sell a home in Melbourne, Florida?  Call me at 321-693-3850 or send me an email.

Image courtesy of renjith krishnan at