Today’s Strategies for Tomorrow’s Payoffs
Tips from the pros on keeping your home marketable — and more livable
by Iyna Bort Caruso
Your home may not be on the market, but keeping it in market-ready condition is one of the best strategies for protecting its long-term investment potential.
“That really does two things,” explains James Retz, Senior Vice President of Daniel Gale Sotheby’s International Realty in Huntington, N.Y. “It prevents major expenses due to deferred maintenance at the time of sale. And it allows you to enjoy living in your home more.”
It’s just one of the tactics real estate experts recommend for maximizing the value of your home. Even in a challenging economy, homeowners can boost sales prospects by being vigilant about routine repairs and proactive about making their home stand out in a crowded market.
Brian T. Cadieux, managing director of the real estate appraisal firm IRR–Residential Valuation Services in Campbell, Calif., regularly assesses executive homes in Silicon Valley. “When you get into the high-end home market, there are certain features that have to be there. If they’re not, it creates much more of a negative impact than in the mid- or low-end of the market,” he says. A top-of-the-line kitchen is one of these features. “Without it, people aren’t going to waste their time unless they’re thinking of gutting the house.” Cadieux has also been noticing a trend in lavish master bedroom suites. “We’re not just talking about a walk-in closet, but dual walk-in closets and tricked-out spa bathrooms. Literally, a little retreat within the house.”
Any additions or renovations should be done for your personal enjoyment, of course, but it’s important to make highly individualized renovations you can easily undo if you decide to sell. There is a whole range of improvements that don’t necessary return 100% of the investment, but some changes — no matter how pricey — just don’t translate and actually detract from a home’s value.
“Don’t step too far out of bounds,” cautions Riley Kirn of Bluegrass Sotheby’s International Realty in Lexington, Ky. “Anything you do narrows or expands the buyer realm. If the addition is too singular, the home may languish when it comes to market.” That doesn’t mean giving up the idea of, say, a basement bowling alley or indoor roller rink. “Just make sure it’s reversible,” Kirn says.
Kirn’s territory is thoroughbred horse breeding country with homeowners hailing from around the world. The biggest mistake he sees is exquisite homes sabotaged by low-end design choices: Hollow doors inside multi-million dollar homes; average craftsmanship; rooms without crown molding; off-the-shelf fixtures; wall-to-wall carpeting versus wood or tile floors; average kitchens and baths. “People demand nice open kitchens with granite countertops, Sub-Zero refrigerators and commercial-caliber ovens. When a buyer walks in and sees appliances that are not custom, it degrades the perceived value from then on.”
A home of distinction must live up to its own high standards. And it must be appointed with the kind of amenities that the local marketplace demands. Nice-to-have in one part of the world may be must-have in another. In Northern California, for instance, wine cellars are a given among elite properties just as pools are in Miami. In regions where sustainability is valued, greening a home can return both feel-good benefits and financial rewards.
Candace Dyal of Dyal Compass LLC, a Boston-based real estate development firm, is putting the final touches of an eco-facelift on a property on Kiawah Island, S.C., an environmentally sensitive area. The home is on the market for $14 million. While other residences at similar price points are being overlooked, Dyal’s is garnering attention not only for its grandeur, but also for its green design and energy conservation measures. “I thought if we could make it more efficient with less waste, let’s do it,” says Dyal.
The home, along with an adjacent guesthouse, sits on a double lot with ocean views. It was originally an old Georgian with engineering problems. Instead of knocking down the structure, Dyal had its facade remodeled to resemble a cedar-shingled Nantucket-style classic and is now pursuing LEED certification, which recognizes homes that meet certain environmentally sustainable standards. She salvaged some of the original structure and then supplemented it with energy efficient technologies. Solar panels, low-flow faucets, drought-tolerant plants and locally manufactured building materials minimize the environmental impact of further land development.
The result, she says, is that the home is 35% more efficient than code. “The investment decision to go green will benefit the future homeowner with significant savings. Kiawah Island is a very nature-conscious place, and this house shares that sentiment. And when you do it right, everyone wins and everyone saves.” In fact, the green movement is catching on so rapidly that Dyal Compass LLC’s next project is a platinum LEED-certified neighborhood on Kiawah.
To safeguard your home’s appreciation, measure any capital improvements as part of the total cost of ownership. Retz says people have to recognize the difference between dollars they’ve put into their home and what it’s worth. Avoid overimproving disproportionately to what the market will bear and overleveraging with home equity loans. “It’s not a personal ATM machine,” Retz says. “Excessive liens in a decelerating market can impact both marketability and peace of mind. The goal is to keep your investment and your home’s value as far apart as possible.”