25 Potential Resale ProblemsBuyers: Take these into consideration BEFORE you buy. Sellers: Having a Realtor who can advise you on how to minimize these issues can maximize your price. Buying a home is in large part an emotional purchase, and it should be. A GREAT Realtor helps you evaluate your decisions with a more objective criteria helping the buyer or seller discover a more balanced decisipon making process. Home is the places where you and your family should feel comfortable and protected. Your decision to purchase a home is a personal choice and an agent can help you evaluate all the many factors.
Remember, there will come a time when you want or need to re-sell the home. It would be wise to look ahead to that time and consider any possible difficulties that you may encounter. The investment value of your home is directly related to its salability. If it is in demand (more scarce), your home will sell at the highest level possible for the market.
The issues noted here are not necessarily deal killers. The home you would like to buy may have a few defects, yet meets your needs in many ways. No home will be perfect. However, your decision should be supported by careful evaluation.
Investors and home flippers look for homes with marketability problems. They are often priced below market, and are perfect for their remodeling solutions. You, too, can think creatively when considering a home. Some problems can be corrected or mitigated.
You may be able to make the design decisions and do the work yourself. Or, you may need to hire design and building help. Solving marketing problems adds a greater level of risk to your home purchase, but possibly, a higher level of satisfaction and monetary reward.
Here are 25 potential re-sale problems:
1. Unusual Easements or Restrictions
If unusual easements or restrictions were not disclosed up front, you may not be aware of them until you see the survey and title work. If you discover these, I suggest that you take a step back, and consider whether you will accept an unusual easement or restriction on your use of the property. Some examples: neighbors may cross the property, pets are prohibited, or major pipelines cross property. 2. Lack of Yard
If a home has much less yard area than others in the neighborhood, buyers tend to eliminate this choice. A steep slope may make the grounds difficult to use and maintain. Yards that have been terraced or landscaped may be exceptions. Compare your property to the yards offered by competing homes. 3. Flag Lot
These are lots with a long narrow strip, leading to the area where the house is placed. These homes will have almost no street frontage, and there may be a building in front of the home. A flag lot in a country setting with a long driveway may be an exception to the rule. In a subdivision of homes with road frontage, buyers will avoid this type of lot. 4. High Tension Wires
The general reaction by buyers to high tension wires crossing near the lot is to simply eliminate the choice. 5. Steep Driveway
I have shown many buyers who will not get out of the car when the driveway is extra steep. 6. Busy Street
The noise related to a busy street is a turn-off to many buyers. This is more of a problem if the busy street is in front of the house and traffic is more visible. 7. Declining Values
If you perceive the neighborhood to be declining, this is a must to avoid. Choose areas that show pride in ownership. However, if you see tear downs and new construction, then the neighborhood may be going through a renewal period, and may be a good risk. 9. Extended Marketing Time
Has the home that you are considering been on the market a long time? Was the price simply set too high? Has the market been slow? Or, is there a problem with the house that you will need to correct? 10. Seasonal or Limited Market
Some homes have a limited market - a vacation area, a primarily student market, or an age restricted subdivision. This may suit your needs, but keep in mind that your re-sale will be limited to these types of buyers. 11. Remote Location
In most cities, areas that are closer to downtown tend to have a larger buyer pool than homes located in remote areas. However, you may choose privacy and country setting over resale potential. 12. No Comparable Sales
This indicates a possible re-sale problem. The home may be very unusual compared to homes around it, or the market may be slow. Understand the underlying reason for few or no comparable sales. 13. Lacks a Typical Amenity In an area where nearly all homes are on the golf course, or have a pool, or include a garage, buyers will tend to avoid homes that lack these features. In an area of mostly older buyers, a home with the main bedroom upstairs may have trouble selling. Look carefully at what is generally offered in a given area. 14. Unusual Architecture Homes that do not fit in to the neighborhood may have trouble selling. For example, the urban modern style may be a good fit in older eclectic areas, but would be hard to sell a uniform suburban neighborhood. 15. Non Functional Floor Plan
Floor plans that make living in the home difficult will turn away buyers. Excessive level changes, rooms that are out of proportion, poor access to the backyard, low ceilings, few windows, and other layout issues will result in a re-sale problem. This may be an opportunity to take down walls, add windows and doors, and make creative changes to improve the functionality and value of a house. Design skill and a fairly high budget will be necessary. 16. Costly Improvements Some homes offer costly or unusual finishes. Examples: Imported fixtures, hand craftsmanship, exotic woods, European appliances, non-native plants, hand decorated walls. But do they have real market value? If these finishes are similar to locally available materials, they may not have a market value equal to their cost. In general, swimming pools do not contribute the full amount of their cost in the value of the home. 17. Out Dated Finishes
Most homes have some outdated finishes - from needing freshening up, to a complete makeover. This is where design skill and perseverance can completely transform a house. If you are new to remodeling, consider your budget carefully. Often the work can get quite extensive, and it tends to grow as the project develops. 18. Water Drainage Problems Poor water drainage may be a serious and costly remediation problem. In addition to habitability problems, the excessive changes in moisture content of the soil can cause a structural problem. Talk with an expert about improving the drainage around the house, and evaluate any previous damage caused by flooding of the interior or water standing around the house. Be sure that you have all the facts on the table and an improvement plan ready. 19. Structural Defects
Structural defects have an underlying cause. They may be due to loose fill on the lot, clay soil, drainage issues, or poor construction. It is crucial to know the source of the problem, and the cost to repair, before taking on a house with structural problems. 20. Inspection Issues
Excessive repairs noted on your inspection report indicate that the house was not maintained or was poorly constructed. Be prepared for some serious work on the house. All exterior claddings, including stucco, should be inspected carefully. An incorrect application may have water damage or mold behind it. A mold infestation may be expensive to remove. Be prepared to document your repairs in order to show a future buyer that the problems have been completely solved. These issues tend to have some stigma attached. 21. Insurance Claims
It is important to know the facts about a previous insurance claim. If it was due to a fire or flooding problem, you should have full disclosure. Large insurance claims are a red flag, and may result in difficulty in obtaining insurance on the home. Many homes have had repairs covered by insurance, such as hail damage, and these are not a re-sale problem. 22. Over Improved
Homes that are over improved for the area, or have excess acreage, often have a difficult time recouping the additional cost. Most people feel safer buying one of the cheaper houses in the neighborhood. 23. Commercial View
Homes in suburban areas that view office buildings or retail centers are less attractive to buyers. Buyers choose suburban neighborhoods for their concentration of single family homes, separated from commercial areas. This is not a concern in more urban areas. 24. Too Exposed
Most buyers in all neighborhoods want a certain degree of privacy in the back yard. If the building behind your home looks down on your backyard or into your family room, this will be a sales objection. This can be mitigated by trees or screening.
25. Oversupply of Homes
8. Safety or Security Problems This is a fundamental re-sale problem. If the balance of supply and demand tips in favor of buyers, then sellers will have to compete more aggressively, and prices are usually driven down. A common source of excess supply is from new homebuilders in the area. Or, sales may be slowed by an economic recession or high interest rates. The oversupply of homes on the market may be a temporary situation. If you sense that there are security problems - burglaries, drug trafficing, or safety problems for your children, take a step back and look at the facts and data on these issues before buying. These kind of problems will turn away buyers fast. |
