Q: Do all home upgrades increase its market value?
If you are considering selling a home in Staten Island or New Jersey, you may be wondering what needs to be addressed in order to maximize your selling price. In general, fresh paint and new flooring goes a long way in sprucing up the interior, as clean landscaping and plantings enhance curb appeal. But not every dollar spent on home improvement projects will generate a worthwhile return on the investment.
In fact, some home improvements, could actually downgrade your home’s market value.
What home improvements could decrease my house’s value?
Examples of home improvements that may decrease market value include:
- a high-end upscale kitchen renovation;
- shoddy or less than professional painting;
- expanded master suites that convert the bedroom closet or an adjacent bedroom;
- wall-to-wall carpeting (it’s a big turn off, especially to renters used to flooring) any pool.
To combat the above problems, homeowners might instead keep kitchen upgrades reasonably priced (choosing quality rather than top-of-the-line appliances or materials), hire a professional painter, rethink master suites that eliminate closet or bedroom space, and invest in wood floors. If you will be staying in the home, and would enjoy a pool and not mind the maintenance or insurance that goes with it, get one but don’t expect to recoup the investment when you sell. Sellers may want to get an appraisal to know their home’s current value before doing any large improvements or attend neighborhood open houses to get a feel for how your home compares in terms of features and value.
Anyone interested in buying a home in Staten Island or New Jersey expects to get a fair price. If the buyer is not paying all-cash but rather is financing the purchase by getting a mortgage, the home must generally appraise for a certain value in order for the amount of the mortgage to be approved. If the home does not appraise high enough and the deal is contingent on the buyer getting approved for a mortgage of a certain amount, the deal may fall through, especially if the loan-to-value ratio is very high. However, if the parties still want to salvage the deal, they may agree to reduce the purchase price and/or the mortgage loan amount so the mortgage gets approved.
Many prospective buyers in need of financing to purchase a home will consult a mortgage broker prior to house-hunting to get an idea of how expensive of a house they can realistically afford to buy– to avoid falling in love with a home that’s out of their reach. Many prospective buyers even get prequalified for a mortgage of a certain amount– which may make the sellers more confident in the sale going through with them rather than a buyer that’s not prequalified. In fact, some real estate brokers prefer their potential buyers obtain a prequalification before showing them homes.
If you are interested in buying or selling a home in Staten Island or New Jersey, the real estate attorneys at Merlino & Gonzalez can help you. Contact us today to schedule a consultation.
From our offices in Staten Island, New York and East Brunswick, New Jersey, we represent clients in both states in all aspects of real estate law.