A Huge Opportunity for Homes With Warts
By Scott Gaertner, Associate Broker
In my over 30-year real estate career I have never seen such a great opportunity to cash in a home with a wart. If you have one you should really consider selling now.
We should begin by defining what a home with a wart is. In a home, a wart is an attribute that a portion of the market would find unappealing and hurt the home’s marketability. Having a wart could be as simple as that your home has poor lighting, a dysfunctional kitchen layout or design, insufficient storage, small bedrooms, not enough baths, or poor curb appeal. These are just a few minor examples of warts where you have little control. Some warts where you do have control are the plaster on your pool is damaged and the water is no longer in it. You have mismatched or unsightly floors or you need a new roof or HVAC system. Some of the bigger wart examples are your house faces, backs, or sides a busy street; your house is near an airport with planes taking off and landing right over your backyard; or your home is close to major power lines. In a typical market any or all these impairments will result in a lower selling price. Occasionally, way less.
The reason is because, when buyers have hundreds of other homes to choose from, they can become very picky. Sometimes to a fault. During times of high inventory buyers may look for reasons to exclude your home. Sometimes, they even seem to enjoy making a game of making insignificant flaws seem monumental. (Every real estate agent who has sold in high inventory markets can tell you war stories.)
How Much of a Penalty?
In the extremes, my experience is that backing or siding to a busy street can be as much as a 25% discount. Buyers feel that a new roof can cost $40,000 to $50,000 in Scottsdale North so they might value the home $100,000 lower for the inconvenience. Power lines can be a 10% to 20% hit depending on their size and proximity. If your house suffers these challenges, and the investment is important to you, you really should consider selling now.
The incredible market we are in now creates a once-in-a-lifetime opportunity. A market with a demand that is five to ten times higher than the supply changes the normal dynamics. Impairments suddenly matter less and, in many circumstances, don’t matter at all. Buyers are looking for reasons to include your home. For the seller with a wart, that is your current opportunity. There have never been fewer homes available for sale in Scottsdale North ever.
So, am I saying that you shouldn’t do what you can to make your home more sellable? It depends. I always say that I will spend a dollar to make two dollars every day of the week. So, if there are things you can do to make people want it even more you should probably do those things. But if you don’t, the penalty will be much lower than normal.
Obviously locational warts can’t be fixed. If the road wasn’t as busy when you bought the home, or the airport redirected the flight path after you moved in, that is tough. But right now, you have been given the chance to right that wrong.
So That Is The Opportunity
In this extraordinary minute in the market you can minimize or eliminate that wrong. You may sell quickly, limit showings, negotiate several offers, close swiftly, get your money, and stay in the house for 60, 90, 180 days or more if you need time to move.
Just make sure you choose an experienced agent who understands what is important in your market. And make sure that they understand how to create a lot of offers and deal with them when they come. Even a good product can go wrong in the hands of inexperienced people.
When will this market and this window of opportunity for distressed sellers close? We have no idea. For months, people have been forecasting the end, but there are still too many buyers for too few homes. But with interest rates suddenly rising we are seeing significant changes in the market. Don’t be left saying, “I wish we would have…” If your home has one of the big unfixable warts this really is an extraordinary opportunity.
Scott Gaertner is an Associate Broker with Keller Williams Northeast who for the past 35+ years has helped more people find their lifestyle niche in the Scottsdale North area than anyone else. He also contributes his thoughts on the real estate market and lifestyle interests in the area and is the creator of ConnectingScottsdaleNorth.com. For additional info, visit ScottGaertnerGroup.com or call 480-634-5000.