May 2013 19

Factors That Slash a Home’s Resale Value

Posted by Jay Banks
Richmond House Richmond House

Those of you who have had to deal with selling your house know that there are a couple of seemingly irrelevant factors that could slash the value of the house significantly. However, home-buyers are not mythical creatures whose behaviour is impossible to predict. You just have to try walking in their shoes and going around the house as if you were visiting for the first time. Try to find the flaws. Easier said than done, you might say. As someone who's lived in the house for quite some time, you’ve got a unique understanding of it, but also a very strong bond with the home. These emotions sometimes make us oblivious to the reality that’s right in front of our eyes.

Everyone can come up with countless ideas on how to improve a house, starting with cheap options (referrals, cleaning, de-cluttering, and so forth) and finishing with costlier approaches (adding an attic bedroom, a wooden deck, an exterior door replacement, and similar changes). These changes are easy, but the real challenge is finding, changing, or eliminating the things that could slash your resale price by thousands.

Vancouver House by pnwra Even This Vancouver House May Have Flaws by pnwra

Basics

If you’re selling a house, you have to consider the fact that 99 per cent of serious buyers will examine your house in detail. If they're not able to do so themselves but are truly interested in the house, they might ask experts to examine it for them. This examination mainly goes over basic amenities, plumbing, humidity and mould, and any damaged wood and walls in the house. You can get ahead of this step by asking certified experts to do an assessment for you and just show prospective future residents the paperwork, eliminating their need to scrutinize the house themselves. Any plumbing that's older than five years decreases the value of the house significantly — and I hope you don't have plastic pipes. The same story goes for any certificates saying that your house doesn't have any mould or any kind of parasites that might need to be exterminated.

Plumbing by Timmy Plumbing by Timmy

One of the blatantly obvious yet fundamental characteristics that will for sure scare a potential buyer away is old paint. When a homebuyer enters a house, he has certain expectations. He needs the house to be clean, with a fresh coat of paint, and he expects that a nice real estate agent will answer every single one of his questions with a smile on her face.

Another off-putting factor is very important in the real estate business: “location, location, location.” Every real estate agent knows that the location of your property is the key to who will buy it. You have to take a step back and think about the community surrounding your house. Who are the people living around you, and who's going to want to live among them? This question should be pretty easy for most people, mainly because it's usually people like them. Just think about your decision to buy the house in the first place and your motivations. Unless you’ve been living there for fifty years and the neighbourhood has changed a lot since then, you can just try to think like you did when you chose the house. Once you’ve got this figured out, you need to adjust the look of the house to the character of the community, so the person who buys it will feel a stronger link to the neighbourhood.

You should also be aware that a house in an area where crime has risen will fall in value significantly. A sense of security is one of the cornerstones buyers look for. If your neighbourhood has low crime, on the other hand, you should print out these statistics and show them to the prospective buyer.


Our House in the Middle of the Murder

If you didn't do so when you were buying your house, try to find out who the previous owners of the house were. If you don’t, you might face a very angry buyer accusing you of withholding information. Buyers tend to conduct their background checks quite thoroughly, and the things we’d generally consider weird might not put them off from buying, but they might slash the price of the house significantly.

One of the very good examples of these price-reducing factors is the previous owner’s habits. Generally, murderers are the biggest discount makers on the real estate markets. (Right after ghosts, of course.)

Dorotha Puentes House in Sacramento by vtourist com Dorotha Puente's House in Sacramento by virtualtourist com

When Dorothea Puente murdered seven of her boarding house tenants and buried them in the backyard, she probably wasn't thinking about the detrimental impact her actions might have on the resale value of her Sacramento house. New buyers (very brave people) Barbara Holmes and Tom Williams said:

We are going to make the most of it and if the paranormals want to come in and do their thing, bring it on.


Smoking kills (Your House’s Resale Value)

More than 15 per cent of households in Canada have at least one regular smoker. Not only do these smokers pay quite handsome sums to buy their cigarettes, but they also damage their property — mostly unwillingly and unknowingly. A new report by Pfizer explains,

A recent survey of Ontario real estate agents and brokers, sponsored by Pfizer Canada, found that smoking in the home could lower the value of your property by up to 29 per cent, with an average house price of $369,000 in Ontario this means a loss of up to $107,010.

Cigarettes by Nufkin Cigarettes by Nufkin

Ontario real estate agents agree that smoking owners make very hard partners in home sales, since buyers are much less likely to buy a house where people have smoked. (This opinion is shared by 88 per cent of real estate agents and brokers.) Almost one-third of real estate agents claim that the majority of buyers aren't even willing to consider the purchase if a former resident smoked in the house.

David Visentin, host of the W Network’s Love It or List It and top real estate agent in Southern Ontario, shared his opinion.

Smoking has a profound impact on how appealing a home is to a prospective buyer. It stains walls and carpets, and leaves a smell that can be hard to eliminate. Many prospective buyers are really put off by homes that have been smoked in, and they can be very challenging to sell.

A tip for those who have unfortunately bought a smoker's house and want to get rid the place of the smell of cigarettes: don’t despair. You can still rent an ozone generator to help you get rid of the odour. You can also eliminate mould, mildew, and fungus with ozone and Hydroxol. An ozone treatment with a high-output ozone generator should be a part of every mould, mildew, or fungus cleanup — otherwise there will still be mould or fungus spores waiting for humidity or moisture so they can begin to grow again. You can easily deodorize cigarette smoke with short shock treatments of ozone. Ozone generators are not the cheapest to rent, but they're absolutely worth it. You can rent an ozone generator for about $120 to $140 a day.

Ozone Generator by Air Zone
Ozone Generator by Air Zone

Be Careful Not to Spend Pointlessly

There are a couple things that you might think greatly add to the value of your house before the resale starts but that actually don't influence the value that much. The Wall Street Journal–recommended portal myspendingplan.com discourages purchasing new windows.

New windows do not add much to the resale value of your home, regardless of how good they look or how energy efficient they make your home. Don’t spend money on window remodeling unless they are literally falling apart or busted up. Clean them up and make sure they are well-oiled instead.

Also be careful not to spend on luxury items like a swimming pool or even air conditioning. These additions don't tend to recover their value in the sale even though they make your home more high-end.

7 Responses to “Factors That Slash a Home’s Resale Value”

  1. This article is so true. The tips and facts should be sent to all of our listing clients!

  2. Helen Centorrino

    This is a great article. I took a buyer to see a home with a smoker in residence and they would not consider it. I never knew about ozone generators.

  3. Jay,a very good article and very thorough! I suggest to my clients that they put themselves in the buyer’s shoes and try to see through their eyes! That is very revealing and sometimes shocking when I do a walk-thru with them and note down what we see. I also suggest it all starts with curb appeal and goes from there. My clients appreciate the insight and it helps tremendously in getting their home marketed and sold!

    Thanks for the information on the ozone generator! Odors can really turn a buyer off!(and their realtor! :-) )

  4. Thank you, especially for the ozone suggestion!

  5. Love the Ozone Generator info. I have never heard of this solution.

  6. Teresa Reilly

    What a great article Jay Banks. Thank you !

  7. Excellent post Jay. I find de-cluttering a big issue. If the sellers home is packed full of their “stuff”, a potential buyer has a difficult time picturing their own belongings inside. I always encourage sellers to de-clutter – renting a storage space if necessary! The serious sellers will, the “water-testers” won’t!
    Regarding plastic plumbing – not all is bad. Always have a qualified inspector have a look… poly’b’ is bad. PEX pipe is good ;)
    Cheers!

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