What Creates Value in a Home?
Not “Location, location, location.” Or, not just that at least.
Regardless of what I write on this topic, it will only be a summary of general principles. You see, in some ways houses are like people. They are all unique, some more than others, and certain qualities will make an individual more popular. The more of those qualities they have, the more popular they are.
Before we get into what those qualities that create the dollar value are, let me point out something that should probably go without saying: Different strokes for different folks. Not everyone wants the same thing and sometimes I see people really happy with a place that most people really wouldn’t be happy with. Some people really don’t mind living next to a busy road or in the crazy part of town. The good news for them is that they save a ton of money on their happiness!
Those of us who have more mainstream tastes will be trying to find a balance of the following list. Think of this list as ways to add value to your home as a Seller and some food for though on how to avoid paying for more than you need if you’re a Buyer:
- Space: (Inside and out) Not a lot to say about this one as I think it’s obvious.
- Number of Beds and Baths: In a house, less than three bedrooms is going to make quite a difference in desirability/cost. Having a second bathroom is a bonus for many and a necessity for others. If you’re a Buyer on a budget, think about what you really need now and in the future. You may find that it makes more sense to not have that extra bedroom and settle for something more modest or you might decide to rent it out for some help with your mortgage until you get more settled financially or your family grows by one.
- View:In Nanaimo, we have lots of ocean views and mountain views. Both add value, especially the ocean view. Even so, it is in such demand that properties, particularly in hilly North Nanaimo, are crowded together on the hill in such a way that they can all share a piece of the ocean view. A home with a sweeping unobstructed ocean view (no roofs, trees or powerlinesat all) will fetch a pretty penny. On the other end of the spectrum, a house with a view of the reclusive neighbours ever expanding junk collection… well let’s just say it’s not a selling feature.
- Age: People like new. The asking price of new properties, which is plus tax, reflect that. I do tell my Buyers that all properties look good when they’re new though and that it takes a little time to see what kind of quality it really has. This is why I’ll generally steer my buyers towards something that is a couple of years old so they can have the feeling of a new home without having to pay quite as much and know that it has been “tested” first.
- Condition: This one is also common sense really and is related to the last one but it of course also applies to older properties as well. A home that is properly maintained will hold its value better than one that isn’t. Less work to be done is great and even if it is dated with its shag carpet and wood paneling, if it has “good bones” it’s a decent house for someone who doesn’t mind doing the updating rather than paying more for a place that already has it done. At least being “move in ready” is a big plus even if dated. Most people don’t want to do work before they move in. Only the keeners who want to save some money and understand how to do it actually do this.
- Location: Also common sense. Actually so much so that it is my opinion that most people focus on this detail more than I think they should. But yes, an important factor. Being next to the train tracks or on the wrong side of them will drop that price considerably. Being on the waterfront or in a quiet spot that is still close to amenities will have that affect in the other direction.
- Quality/Style of finishing: When people talk about finishing they generally mean things like flooring, paint, trim, counters, doors, light fixtures and so on. Newer is almost always reacted to as nicer and this applies both inside and out. Sadly, a lot of do-it-yourselfers know this and not much more. So they try to fix up their home themselves hoping to add value but botch up the job and end up having the opposite effect. To those people I say, make sure your buddy who helps you do it actually has professional experience or hire someone who does. You see, nine times out of ten when a homeowner proudly tells me “I did this myself!” I’m thinking “Yeah, I can tell…”
- Light: Lots of light feels like lots of space. This is part of why when us Realtors say to use “light neutral colours” we mean some sort of off white. It lets people imagine their own stuff and ideas in there but it also makes for a sense of space. Lots of light also makes people feel happy and for the lack of a better term, “free”. Doubly so if it’s natural lighting. Those who are into gardening or energy efficiency like natural light even more so being south facing is a bonus for them.
- A Sense of Urgency: When a property is fairly fresh on the market it will, as a rule, attract better offers than one that has been sitting there for a while. This has everything to do with pricing it right in the first place in a way that will attract Realtors and their Buyers alike. A buyer will typically look at 8-15 places in person after having looked at hundreds online in the same price range with similar criteria before making an offer. They will usually have a plan B as well. If you’re selling your property it has to be number one on that list. Not second or third. Number one. And if it really is a good deal, a Realtor who brings some Buyers through who don’t end up buying it for whatever reason will often bring through others buyers because they see value in the property the whole time knowing that it might get snatched up by some other Buyers.