Home values can vary over time—peaking during a seller’s market and hitting rock bottom during years like 2008. A smart home seller will monitor their home’s value over the years so they know the general price range for their home. But if you want to do some renovations to increase the value of your home for sale across Ontario, or are just wondering why the value isn’t increasing much over time, you need to understand what other factors influence a home’s value. Here are some variables that might be stalling your resale value:
Location, location: proximity to a busy highway or proximity to not much at all…poor home placement almost always guarantees stagnation of value. This is why two identical homes in the same neighbourhood can have different listing numbers if one on a cul-de-sac and the other backs on to a busy street. If you’ve sat on a property that has seen infrastructure spring up all around it in recent years, you’re likely to witness a jump in perceived market value, especially if the specs of your home appeal to younger generations looking for walkability.
Stuck in that difficult in-between stage: character-filled old properties are always in high demand, especially for there historic charm, as are new-constructions homes where zero renovations are needed. But a house that is 30 or 40 years old holds a lot less sway over discerning shoppers, especially if its layout is odd or outdated.
Outdated renovations: does your kitchen celebrate the early 2000s trends, with dark wood cabinets and wall-to-wall carpet? Is your master bathroom an ode to glass brick walls and sponge paint? Renovations that were in vogue when you bought your home might now cause a buyer to come in and turn up their nose. This is not to say that a major renovation is the best way to increase your net return. It is better for sellers to improve their property rather than fully renovate and then price accordingly. Fresh paint and flowers spruce up the place for pennies on the dollar.
Renovations that suit your taste only: maybe you put in your dream kitchen a few years ago. The problem in executing your singular vision is that you risk finding out no one else shares your taste. Most buyers want to put their own stamp on their new home rather than pay a premium for your renovation. If buyers can’t see past your personal sense of style, your home could sit on the market for months—or worse.
Negative history: was your home once flooded during a storm and suffered from mold as a result? Was your street or neighbourhood once associated with high crime rates, even if that information is now outdated? Did a fire ever occur on or near the property? Did a crime ever occur? It is near impossible to scrub the public record of your home’s history; if your house has a storied history, then savvy potential buyers will know about it—and they may not be eager to inherit these issues.
Too small…or too big: one of the first stats buyers look for on a real estate site is the square footage. Most buyers are looking to upgrade, so your 500-square-footer might have limited appeal. The bloom has fallen off the McMansion rose. The recession of 2008 taught us that oversized properties aren’t always an asset, and that a large house can become a burden if the market isn’t strong enough to support it. Many buyers now are more pragmatic about how much space they really need to be comfortable.
Bedroom or bathroom shortages: the set of stats scrutinized by buyers? Bed and bath counts. There’s no buyer out there who doesn’t dream of having a separate guest bedroom or getting a whole bathroom to themselves. Having only one bathroom or a low bedroom tally won’t help even the most coveted address.
Out of step with neighbouring houses: is you’re a single-family in a sea of townhomes? Is your condo in a modern building surrounded by historical structures? If your place lacks area comps, a bank is going to have a hard time assessing its resale possibilities and is likely going to underestimate your home’s worth come appraisal time. And that unfair assessment could give your buyer a reason to try to negotiate down the sale price.
No ‘wow’ factor: some houses or condo buildings have an intangible ‘it’ factor. It could be rare architectural finishes or proximity to a renowned landmark. But if there’s nothing that really distinguishes your home—if there’s no ‘hook’ to help make it stand out—it’s sometimes difficult to attract attention, especially during the busy spring market. Even if you take your property off the market for a reset, its listing history remains on record and might drag down future pricing.
CENTURY 21 Miller Real Estate Ltd.
Brokerage Independently Owned and Operated
#4 Office in Canada
By Production CENTURY 21 Canada 2013
467 Speers Road,
Oakville, ON L6K 3S4