Austin Home Buyers, What about Resale Value?
I find myself in this situation with home buyers from time to time, particularly with first time home buyers. They come across a house that is obviously priced below the others in the neighborhood. Sometimes it’s the only house available that they can afford in a nicer neighborhood that they would love to be in. On paper it looks like a really sweet deal. Online it looks good. Its been on the market for seven months and has seen multiple price reductions. Hmm . . . why hasn’t someone snapped it up?
Trouble is, it usually backs to a busy street (highway even), it has one bedroom or two bedrooms where others of similar size have three or four. The garage has been converted to a living space. There is a telephone pole in the middle of the backyard (yes, I’ve seen this). The driveway is almost at a 90 degree angle. It is always something. Often times you have to dig a little bit deeper and most often use Google earth & aerial views of the property. I’ve yet to find a listing agent who goes out of his/her way to highlight the flaws of a house on MLS or in their online advertising.
I find that sometimes, especially if its THE neighborhood or if the price is really enticing, emotions kick in and buyers start to entertain the thought of looking past the functional obsolescence (SAT word) or obvious flaws in the property because options might be limited. But, what about resale value?
I have to believe that there is a price that will sell every house but that doesn’t mean that its the best option for you, the buyer. I refrain from making lifestyle choices for my clients. They have to ultimately purchase the property that best suits their needs and that they can see themselves living in happily ever after. But, I do have an obligation to counsel them to weigh the positives and negatives of their potential decision.  I always make sure to point out that this or that is going to drastically effect the resale value of the property.
Yes, you may get a really good deal on the house now but you are going to have to give a really good deal on the house when you go to sell it.  Since we cannot control what the market is going to do 5,10, 15 years from now, you are taking a pretty big risk buying a property that is difficult to sell in a great market. I always tell them that if this house makes you really happy and you are going to live here for 10-20 years and you are not worried about resale value then by all means lets make an offer. But, if you do think that you are one day going to sell, you better think long and hard about that decision – oh and don’t ask me to list it for you.  (That was a Joke, I promise)
Typically, once they have had a chance to sleep on it or we find something else that they like just as much, they see the flaw in their “in the moment” logic. Fortunately for them and for me, I have not had a client that bought what I would consider a real lemon, nor have I had to list one, but I imagine Ill continue to find myself in a position to educate about resale value.
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