Hello Katie,
We are building a home and while we think we’ll live in it for 5-7 years, our friends told us we should think about resale value when we build or remodel. We’re doing all of this so we can get the house we want with amenities that appeal to us and our lifestyle. What should we consider in terms of our eventual resale down the road?
Sunnie and Peter, Corona del Mar
Hi Sunnie and Peter,
This is SUCH a great question and one I wish more people asked their agents!
Anyone who builds or renovates a home that is hyper-specific to their own personal taste and unique lifestyle needs should know that there is a high likelihood that the audience they might attract upon selling may be very limited. Worse, if this 'dream home' costs a fortune to put together, sellers need to understand that it’s quite possible that they will not get 100% (or higher) return of what they invested in their dream project when they sell. Years ago, I met with a couple who had customized a luxury tract home with gold faucets and hardware with lapis lazuli insets, custom carvings, and very specific peach marble floors. It was their dream home, and it was very difficult to sell, because the expensive finishes they invested in were what most buyers wanted to immediately replace. The finishes added no value and in fact, actually reduced the value, because the buyers would need to remodel, thus adding to the buyer’s cost.
Our COMPASS Chief Evangelist, Leonard Steinberg recently shared his thoughts on this subject:
1. Everyone is entitled to their dream, especially if they have worked hard. You should enjoy the fruits of your labors.
2. If you are OK with potentially selling at a loss, go for it, but go for it within the realm of reality, knowing your highly specific tastes may not translate to another audience.
3. If you want to avoid future losses, as a bare minimum, consult with a professional real estate advisor BEFORE building out your dream, best done by consulting an agent who has design knowledge. I witnessed Melissa Marcogliese of COMPASS Northern Westchester meet a client well before a renovation/new-build to identify areas where a 'next owner' may have the 'easy capacity' to add a bathroom or bedrooms, or adjust a taste-specific layout/design at a reasonable cost, faster. Sometimes simply providing a plumbing stack in a wall for a future bathroom can make all the difference.
4. And then, of course, there is staging, which can help buyers see the future, and possibly negate some of the highly taste-specific elements that could prevent a sale or result in deeper discounting.
Katie Machoskie is a REALTOR and Founder of the Machoskie & Associates team at COMPASS in Orange County. With over 23 years of experience, she has over $1.4 Billion in sales. She and her team of neighborhood specialists are ready to assist you anywhere in OC. Have a question? Email her at [email protected] DRE#01380037 Follow her on Instagram @machoskiehomes.com