A home is a huge investment: You have the down payment, home renovations and upgrades, and years of mortgage payments. Ultimately, you’ll want a return on that investment, and resale value should be part of your decision-making process from day one – yes, even as you yourself are shopping.
Why does your home’s resale value matter? Several reasons:
Typically, the first home you buy won’t be your last. The average U.S. homeowner stays in their home for nearly 12 years, with duration fluctuating from shorter stints in busy cities to staying for decades in small towns, according to industry data. When it’s time to sell your home, a high home value is vital.
Even if you plant your roots for good, your home’s value has an impact on your net worth, your ability to get a home equity line of credit, your insurance and property tax costs, and your overall financial well-being.
Here are eight resale factors to consider as you shop for a home:
1. Location, Location, Location
The location of your prospective new home can be make-or-break for its resale value. Is the neighborhood buzzy with lots of amenities nearby or is it on the decline with a zip code with some notoriety?
You can zero in on the neighborhood’s reputation by looking at:
Current and historic property values
School district ratings
Crime rates
Access to parking, bike storage, highways and public transportation options
Access to grocery stores, community centers, and other amenities
Access to green spaces
Proximity to police stations and hospitals
Growth potential, including plans to build infrastructure and other developments
Ideally, property values are rising with access to good schools for families, a smooth route to the city center for work, and plenty of options for groceries, dining out and entertainment.
Even the most immaculate of homes will be a hard sell if they’re in the wrong part of town.
2. Curb Appeal and First Impressions
Curb appeal refers to how attractive the property is when viewed from the street. Is it on a quiet tree-lined street with a neat and tidy front yard and big, bright windows?
Anyone who’s been to an open house knows – sometimes you’ve made up your mind about a house before you even step through the front door.
Pay close attention to your first impressions when you drive past the home:
Landscaping, trees, gardening, and the lawn in front of the home
The exterior condition of the home, including the driveway and roof
The size and condition of windows and the front door
There are some things you can spruce up on your own when its time for you to list the property, but you’ll need to take stock of fixtures like on-the-street parking, pedestrian crossings and street lights for safety, and how well-kept homes in the vicinity are.
If you’re turned off by something, future buyers likely will be, too.
3. Layout and Floor Plan
Trendy finishes can be removed and replaced, but the blueprint of a home is harder to change. As you walk through your potential home, does the floor plan flow and make sense to you?
Try to steer clear of homes with quirky layouts:
Oddly-shaped rooms
Split-level floors that interrupt flow
Bedrooms and bathrooms that can only be accessed by walking through another room
Staircases in awkward places
If a layout is off-putting or unintuitive to you, chances are it will be to a wider audience of homebuyers, too.
Traditional layouts tend to be more popular. Report after report has highlighted how much families value open concept spaces that can shapeshift to their needs:
Flexible open, concept layouts
Spacious kitchens and living rooms
Ample storage
Two bathrooms – at least one ideally on the ground floor for accessibility
Plenty of natural light
Private outdoor space
4. Upgrades that Count
Not all renovations are equal. Upgrades do not automatically equal higher value.
Kitchen and bathroom upgrades tend to offer the best return on investment, as well as the latest in energy efficient windows, updated HVAC systems, and an overhaul of major appliances.
But overly customized upgrades – like a wine cellar, home theater or outdoor swimming pool that needs plenty of maintenance – can put off buyers instead of piquing their interest.
5. The View from Inside
During a home tour, check out the views from the windows. Are you looking at a strip mall parking lot or are you facing a lush green park?
While a beautiful view won’t automatically bring in top dollar, bad views will turn off most buyers. This point is emphasized when it comes to multi-story homes and condominiums.
Before you make a purchase, check on:
Planned developments that might affect the home’s view in the future
If green space in front of a home, such as rivers, parks or forests, are protected
6. Age and Condition
Buyers will ask about the bones of the home: the roof, the foundation, electrical, plumbing, and HVAC systems, as prime examples.
If any of these are in poor condition or nearing the end of their life and requiring major updates, you can count on buyers asking for a discount – or walking away.
There’s a reason why new construction homes are always in demand – they’re in mint condition with warranties in place, alleviating any worries altogether.
7. Natural Light and Orientation
Homebuyers tend to want natural light and a sunny orientation.
South-facing windows and outdoor spaces will receive the most amount of sunlight throughout the day compared to spaces with other orientations. This is prime real estate for homebuyers in cooler climates who love to garden or host outdoor gatherings. Homes with good natural light also tend to have lower heating and electricity bills in colder climates.
In warmer climates, you might want to look for the opposite: a home oriented east-to-west, minimizing direct sunlight on east and west walls, and maximizing natural ventilation. You’ll also want plenty of shading to minimize those air conditioning bills.
Orientation matters when it comes to sound, too. Are the bedrooms facing a busy road or are they calm and quiet, perfect for tranquility in the evenings?
Look at how much sun pours into the home, open the windows, and listen closely to what you hear.
8. HOA fees and Other Recurring Fees
If your potential new home has a Homeowners Association, it’ll likely come with monthly or quarterly dues for shared amenities and upkeep. While you may be comfortable with this expense, other homebuyers may not want to shoulder this added cost.
Ask how much HOA fees are and gauge whether they’re worth the cost. You should also gather information on how often they’ve increased over the years to estimate what’s to come.
Take inventory of other expenses homebuyers may be subject to if they buy your home. Counties will collect property taxes, but in some areas, cities may add property taxes on top of that, too.
And if you’re in a region that’s prone to flooding, wildfires or other extreme weather, homebuyers may need to account for premiums to their homeowners’ insurance.
All in, these potential costs may spook homebuyers away.
