Most of us have a good understanding about what increases a homes value; but what if we flipped the question and asked “What things cause a home to LOSE value?” Here are three ways that may decrease the offer value on a home.
1. POOL. Contrary to popular belief, installing a pool limits your buyer pool. Not everyone finds pools a benefit; in fact, they can sometimes be seen a liabilities. Buyers automatically start calculating the cost of upkeep: maintenance on equipment, increase in electricity and heating bills, and lastly repairs.
If it so happen you find a buyer that values a pool it does add a bit of value; however, it’s not as valuable as you think because of “adverse selection” ( remember the theory from Economics class? lol). Simply, buyers will value the pool less because there is an inherent risk that the pool was not properly installed or maintained.
2. No garage, small garage, or messy garage. A garage is valued as a “Room.” So have having a 3 bedroom with no garage is perceived as a 2 bedroom; in most cases. Where garages are nominally considered are condos, town homes, or highrise living.
A messy garage is almost as bad as no garage. If your sellers are using the garage as storage, buyers can’t get a sense of the “space” and all they see is junk. One solution is to have the sellers place their items in an off site storage facility.
3. Poor maintenance.If you have weeds growing out of the front lawn or have paint pealing off the walls, it’s time to rollup your sleeves and get to work. People will subtract the cost or not make an offer on the house. And if people think the house hasn’t been taken care of, they will wonder what else they’re not seeing.