Thinking Ahead when Buying and Selling – 12 MUST-DO tips!
“Sam!”. “Can you move the car?”. Silence from the 2nd story. “Jade!” “JADDDDDDE!” You can hear a pin drop upstairs. Only Paul Simon does a better rendition of the Sounds of Silence. That’s why I was so happy this week when they all left. My wife Veronica was a bit sad. Me? The cats and dog more than replace the silence of the kids. And we have Facetime these days. Call me cold and cruel but I choose driving out of the garage without the search committee on the 2nd story over the kids every time now.
When we bought our home 20 years ago, Sam was 3 years old. It had a short driveway, and I vaguely thought about a car problem… but that was 13 years away. Little did I know they would grow up and we would have 4 cars jockeying for position in our typical Florida 1 ½ car garage and 2 spots in our short driveway. At one point we gave some thought to moving because of this dilemma. In some situations, we would have had to because street parking is not allowed.
When a market is extreme, Buyers have to settle. When we purchased 19 years ago, we got 85% of what we wanted, which is pretty typical. Musts for us were having a lake view, avoiding highway noise, and 4 bedrooms. It had a pool which we thought we wanted and a primary bedroom on the first floor. Downsides for us were a tight backyard, laundry room on 2nd floor, short driveway, and a few others. The funny thing is the short driveway wasn’t a problem for over a decade and now as empty nesters it isn’t again. Sometimes features which are important to you go in and out of importance depending on where you are in your life cycle.
Going back to the last 2 ½ years, the amount of settling is closer to 50% than the traditional 85%. The bad news for those that really settled is they will find themselves desiring to move more over time. To make matters worse, the more deficiencies a home has the more it depreciates compared to homes that are more desirable, as the market reaches more equilibrium with inventory. Homes that have an open syphon of what everyone wants (1-story, lake view, 4 bedrooms, powder room, pool, no noise, 3 car garage, remodeled, great room plan, etc…) will always be more liquid and hold value better than those with a closed syphon of wants/needs. Days on market and depreciation must be kept in mind when purchasing a home with features that don’t fit the bill for the majority.
Here are my top 12 tips for thinking about resale and thinking ahead in general….
- Buy the neighborhood first. Most people move first because they pick the wrong neighborhood. We literally developed Echo Home Match our propriety matching questionnaire to help buyers figure out which neighborhood was the right fit for them.
- Buy that extra room. Avoid 2 bedrooms and know that 3 bedrooms + a den is much more saleable than a 3 bedroom. There was a study years ago that I read in which a 3 bedroom was 70% more liquid than a 2 bedroom. When we purchased, we looked at 3 bedrooms but ultimately stretched for a 4 bedroom. That decision ending up saving a 2nd move as we needed that extra bedroom for office space and guests. Today with people working from home more, that extra room is even more vital.
- Pets. 62% of the population have dogs. In Florida with an older population it’s even more. Millennials are having more pets as well. Read how to stage a home with a pet, More people move because of pet restrictions than ever before. It shocks me sometimes but as I now know, once the kids leave, little “Fat Knuckles and Moo Moo” are your children. Some move because there isn’t enough yard space for their furry friends. In condos (see pet restrictions by condo) or townhomes, neighborhood restrictions and breed restrictions come into play. That old “my animal is a therapy dog” isn’t playing as well anymore.
- Primary bedroom downstairs. This is giant for a number of reasons. The first is that people over 50 just want it. And in Florida, that is a big demographic. In some snowbird zero lot line neighborhoods, I’ve seen 50% depreciation in bad markets for a 2nd floor primary bedroom. Mirasol as a community didn’t even build a home with a 2nd floor primary. If you keep the house long enough like us, we won’t later have to do a 2 step in move because our primary bedroom is on the first floor. There is a 3rd reason though and that is insurance. Insurance companies are capping water damage and most severe water damage occurs from leaks from the 2nd floor.
- Exposure. People end up moving because they purchase without understanding exposure. A home cannot get enough natural light or be in the shade on your deck because of exposure. See some ROI on lightening up your home
- HOA/COA. Restrictive HOA or Condo Rules can prohibit lots of what you want to do or how you want to live. Read these thoroughly and think about things you might want to do down the road before purchasing. Same with the financial health of a community. Poor financials can force a move with surprise assessments. Also, does the community feel fit your needs?
- CBS versus Wood.There is nothing wrong with a wood frame home. However concrete homes are more in demand and they really stopped building them 30 years ago after Hurricane Andrew. Your insurance premiums are going to run higher and your syphon of Buyers is going to be smaller. If you get into a tougher market, expect days on the market to run longer.
- Ceiling Height and Great Room Plan. In the NBA, you can’t teach height as they say. Same with resales. The ceiling height and the layout are the layout. People like volume ceilings and Great Room layouts.
- Pool. If you are purchasing a single-family home and it’s over 2,000 square feet, a pool gives you more liquidity when you sell and a higher ROI. A pool is pretty to look out and serves a fun purpose for many. Lots can’t afford to finance it as well. Buyers just don’t search for homes without pools although if they are paying cash, they should. See features in a pool that get a good ROI.
- Views & Road Noise. People buy views. I’ve never had someone say, “Please find me a room with a view of an unsightly wall”. I’ve also never had someone say, “Please find me a home with the soothing sounds of the Turnpike or I95″.
- Roof Age. This never used to be as much of an issue but insurance companies are tightening up what they will insure so you need to make certain of what your insurance costs are. Find out more about Changes in Florida Homeowners Insurance.
- Long Driveways and 3-car garages. Unless you like silence, no one responding to you, or you only ride bicycles of course!
Jeff Lichtenstein is owner and broker of Echo Fine Properties, a luxury real estate brokerage selling real estate in Jupiter and homes in Palm Beach Gardens, Florida. He has 20 years of real estate experience, has closed over 2,000 transactions, and manages over 70 agents in a non-traditional model of real estate that mimics a traditional business model. Some publications he has been quoted in.
Feel free to ask him a question directly at jeff@EchoFineProperties.com including a complimentary real valuation of your home.