Archive for the ‘Market Value’ Category

10 Things Not to Do to Your Home When Selling

Tuesday, November 10th, 2015

10 Things Not to Do to Your Home When Selling | Spruce Grove Stony Plain Parkland County Real Estate | Barry TwynamIf you’re planning on selling your Spruce Grove, Stony Plain, Parkland County or Edmonton area home, you want to sell it fast and for the best price. You’ve probably gotten lots of advice about all the things you must do. (I’ve written plenty of blog articles myself on the topic. This is the most recent one, and it includes links to the other articles:  4 Tips to Sell Your Home in Any Market)

But what are some so-called upgrades or updates that won’t pay you back and might even hurt you when it comes time to sell?

Some of these are items you may have built into your home for your own pleasure and convenience. Use them and enjoy them, but be aware that other people might not be so thrilled with them, and may be reluctant to pay for them.  Others are things you may be considering doing because you’ve heard they’ll add value. It’s true that most buyers these days are looking for a home that requires no improvements before they can move in, and sellers are more likely to get top dollar for their home if everything is up to date. But – how much more should you invest in your home to make it sales-worthy?

1.  Special rooms

The average house buyer is looking for at least 3 bedrooms, AND the average buyer tends not to have a lot of imagination when it comes to use of space! Using a bedroom as a home office won’t put off a buyer, but converting a garage to a family room might kill your sale. In addition, most buyers don’t want dedicated spaces like yoga studios, hair salons, sound-proofed recording studios, even tiered theatre rooms which are popular at the moment, and certainly aren’t willing to pay extra for them. In general, it’s wise to avoid making permanent structural changes that alter the intended use of a space or limit its future use.

2.  Trendy or personal-taste decorating

If your daughter’s bedroom is fluorescent pink, and the dining room has splashy floral wallpaper, you might want to dial things back to neutral before listing your home. Paint – in a neutral color – is the one upgrade which will benefit you and pay you back, especially if you do it yourself and do it well.

3.  Appliances

A lot of buyers these days want stainless steel, but installing brand new top end appliances won’t get you a higher selling price.

4.  Flooring

Should you replace the wall-to-wall carpet in your home, especially if it is an out-of-date color and starting to show signs of wear? Most buyers these days are looking for solid flooring, such as hardwood, laminate, ceramic tile and the like, but this type of flooring isn’t cheap, and you are unlikely to get your money back when you sell. My advice would be to go for a good professional carpet cleaning and hope for the best!

5.  Built-ins

Extra storage is always a boon to homeowners, but what if you’ve built in extra cabinets, cupboards and shelving in every room in the house? Lots of buyers will appreciate this but not to the point of compensating you for what you probably spent.

6.  Sunroom addition

A nice idea, especially in our climate, but hugely expensive to add on, and many buyers would not want to take on the extra heating and cooling costs.

7.  Swimming pools and hot tubs

These cost a lot to install and require significant maintenance. You won’t get your money back on these, and you may even find some buyers are turned off by them. Definitely do not put more money into these to spruce them up just before you sell (although remember that items in your home should be in good working order).

8.  Roof

Surprisingly, a brand new roof won’t add value to your home, although it might make the home easier to sell. Replace your roof if you need to but don’t expect to recover your cost.

9.  Backup generator, and other system improvements

Practical, useful, potentially life-saving in our area, especially if your home is on an acreage… Who wouldn’t want a backup generator?! Most buyers don’t want to pay for this extra but instead would probably consider it a nice bonus. Most people also, unfortunately, will not pay extra for a new furnace, plumbing updates, air conditioning, new hot water heater and the like. These are part of the invisible systems that buyers have every right to expect will be in proper working order. Think of these as regular maintenance instead of an investment in your home. Improvements of this type may make for a faster sale and possibly less haggling on the price, but won’t increase the price from what similar houses are selling for.

10.  Anything that is over the top for the level of home and neighbourhood

We all want our homes to be comfortable and beautiful, but if you put a gourmet kitchen or luxury ensuite into your modest home, or splurge on fancy landscaping (fire pit, gazebo, fountain, fish pond, basketball court…) so that these items resemble a spread in House Beautiful, chances are good you’ll recover only a fraction of your costs when it’s time to sell. Avoid over-improving your home. I recently listed a home whose owner had installed a Bose sound system throughout his home, an expenditure of $100,000! He loved it while he lived in the home, but we knew we would be unlikely to find that special buyer willing to pay the price. If you can’t take expensive equipment with you, be prepared to swallow the loss.

Value in a home depends on many factors.  Some of these include:

  • the local market (the number of homes currently for sale in an area, prices of homes recently sold, how fast they sold, etc.);
  • the age, size and style of the home;
  • the quality of construction;
  • the home’s condition, including regular maintenance and updating;
  • location, including amenities and accessibility, type and size of lot, nearby traffic patterns and green space, crime levels, etc.

Taking on a major renovation just before you sell in hopes that you’ll score big is pretty much always a bad idea (assuming that your home is in reasonable condition. If it isn’t, that’s a whole other discussion!). My best advice? Fix all the little things that need to be repaired, do a superior cleaning job, and paint anything that’s looking shop-worn.  The most important thing to remember is that a home is only worth as much as someone is willing to pay for it, and it’s probably not worth it to put more money into it just before you sell.

Need help in deciding how to best present your home in the market? I’m happy to provide that help. Call or text me at 780-910-9669, email me at barry@barryt.ca, or contact me here.

Recent Canadian Home Prices

Tuesday, December 7th, 2010

Recent Canadian Home Prices |Spruce Grove Stony Plain Parkland County Real Estate | Barry TwynamMost of us wonder from time to time what our home in Spruce Grove, Stony Plain, Parkland County or the Edmonton area is worth in today’s real estate market, and we may also wonder what prices are like elsewhere in Canada.

From the Canadian Real Estate Association:

“Each month, The Canadian Real Estate Association compiles the statistics of existing homes and properties sold through the Multiple Listing Service®. This provides an overview of the existing housing market in Canada, and tracks market trends for prices and properties sold.”

Here are CREA’s latest home price comparisons: 

October 2010 October 2009
British Columbia $521,871 $493,328
Alberta $344,569 $351,768
Saskatchewan $234,147 $230,958
Manitoba $224,439 $204,606
Ontario $347,788 $337,410
Quebec $257,456 $239,240
New Brunswick $152,087 $151,218
Nova Scotia $194,578 $189,570
Prince Edward Island $150,091 $155,028
Newfoundland/Labrador $231,039 $196,847
Yukon $304,800 $296,738
Northwest Territories $352,869 $363,435
National Average $343,747 $341,232

 

Can we draw any conclusions from this data?

We probably knew already that the highest home prices are to be found in BC, but we can see a few other things:

  • In October 2010, only 4 provinces/territories had prices above the national average:  BC, NWT, Ontario and Alberta, in that order.
  • The average selling price in October 2010 for a home in BC was roughly 3 ½ times that of a home in the area having the lowest average price in Canada, PEI.
  • Average prices were higher in October 2010 than the previous year in every area of Canada except Alberta, PEI and NWT.

The interactive map on this page of the CREA website also allows us to compare average selling prices for a few of the major cities in Canada.  For Edmonton and Calgary this is what we find:

October 2010 October 2009
Edmonton $317,096 $351,768 -$34,672
Calgary $399,679 $393,574 +$ 6,105

 

Now why, we might ask, did Edmonton prices drop close to 10% during the one-year period between October 2009 and October 2010 while Calgary’s increased more than 1.5%?  The data provided by the Canadian Real Estate Association provide only the bare facts.  Chances are, we’d discover many complex reasons for this disparity:  things like types of property sold (single family homes vs. multi-family dwellings, condos, etc.), the number of homes on the market, along with features of the properties, such as age, size, condition, location, amenities, and many more.  Average home selling prices also don’t tell us about historical price gaps between Calgary and Edmonton, with Calgary prices usually being $50,000 to $60,000 higher than Edmonton.  In the end, determining a home’s value is a complicated business!

Interested in a free home evaluation?  Give me a call today at 780-910-9669 or email me at barry@barryt.ca.

What is a Market Evaluation?

Monday, June 21st, 2010

What is a Market Evaluation? |Spruce Grove Stony Plain Parkland County Real Estate | Barry Twynam

A Market Evaluation is a comparison of your home, whether in Spruce Grove, Stony Plain, Parkland County acreage properties, the Edmonton area or elsewhere, with homes that are currently on the market or were recently on the market. They include “Active Listings”, “Expired Listings” and properties that have recently “Sold”.

 “Active Listings” are homes currently on the market that are similar to yours and are considered to be your competition.

“Expired Listings” are properties that were on the market but didn’t sell.  There can be a number of reasons for a property not selling:  poor marketing, bad location, a house that needs extensive work…   But the main reason that a house doesn’t sell is the price was too high.  There are generally buyers for most segments of the housing market, if the price is right.  There are also strategic ways of adjusting the price of a listed property, usually downwards, while it is on the market.

Recently “Sold” properties that compare closely to your house probably tell the most about how much your house is worth.  These are properties that buyers felt were the best value for them, given the choices available to them at the time. Now if one of those houses that “Sold” were next door to your home, sold yesterday, was built in the same year, same square footage, identical lot, same development and layout, same parking amenities, same number of bathrooms and bedrooms, same basement development, same condition… and was exposed to the market for all to see and then sold, then you would have a really good idea of what your home should sell for.

However, it is never that simple.  So we compare similar homes (“Active”, “Expired” or “Sold”) and we make adjustments to the probable value of your home, either up or down), to compensate for the differences.  The more homes we compare yours with, the better idea we have of the true value of your home.  Some examples would be: busy street versus a quiet cul de sac, larger home compared to a smaller home, large to small lot, extensively renovated compared to everything being original, in let’s say a 20 year old home.  And if you are fair and honest in these comparisons, adding value or subtracting value, one can start to visualize how much your home is worth.

Usually when I do a market evaluation I bring along all the relevant comparisons, full highlight sheets of “Active Listings”, “Expired Listings” and recently “Sold Listings”.  Although I could select a few properties that closely compare and then have a computer program break down averages (days on the market, square footage, number of bedrooms, etc), I find it more informative to show my clients everything I see and explain to them how I analyzed the information to come up with what I think their home is worth.  It is surprising how people will comprehend a seemingly complex calculation when given all the information, and a slight tutorial on how to analyze the information at hand.

See also the article on BarryT.ca entitled “What is Fair Market Value?”

If you are thinking of selling your home in Spruce Grove, Stony Plain, Parkland County or the Edmonton area, I would be pleased to do a Market Evaluation for you.  Please call me at 780-910-9669, or email me at btwynam@telusplanet.net

Not intended to solicit properties currently listed.

Barry Twynam, Realty Executives Leading
#1 14 McLeod Avenue, Spruce Grove, Alberta, T7X 3X3
Tel: 780-962-9696 Cell: 780-910-9669 Fax: 780-962-9699
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