Like any investment, you want your home to appreciate, so you can eventually reap the benefits of ownership: selling your home for more than you purchased it for. If you’re considering selling your Austin home — in the near future or down the road — it’s vital to know what can bring down your property value.
A house is made up of a large number of physical and locational attributes that can either add to, or subtract from, its value. There are many things that impact a home’s value; some are obvious; some aren’t. Here, we’ll outline 10 factors that can negatively impact the value of your property. Consider these issues before putting your Austin property on the market.
1. Neglected Repairs
Those repairs you’ve meaning to get to but never seem to have the time for, may be bringing down your property value. The U.S. Department of Housing and Urban Development (HUD) provides a comprehensive maintenance checklist to help you improve and monitor your home’s condition. Here’s an overview of deferred maintenance that impacts home value:
- Damaged or old HVAC system
- Termite damage
- Wood rot
- Decaying foundation
- Frayed electrical wires
- Cracked driveways and pathways
- Leaky plumbing
It’s often more expensive to remedy any problems the longer you wait. Keep an eye out for any problems mentioned above. If you develop any of these issues, it’s important to hire a professional immediately.
2. Unnecessary Upgrades
When you want to add value to your home, making improvements seems like the most obvious answer. But not all improvements add value to your property; in fact, some upgrades may hurt your home’s value. For instance, turning two bedrooms into one, spacious master suite can be a gamble from a value-added perspective since many buyers generally prefer more (smaller) bedrooms rather than an unusually large master bedroom.
Wondering what upgrades ARE worth the time and money? Installing a new roof, adding insulation, and replacing windows will generally increase property value because you’re improving the efficiency and safety of the home. Updating your home’s electrical and refinishing hardwood floors can also add to your home appraisal value.
3. Too Many Personal Touches
While painting your walls a bold color and laying intricately-patterned tiles on your floors captures your style and make your house feel more like a home, such personalized touches won’t appeal to a broad range of buyers. Worst, it can turn away potential buyers who see these touches as an added expense, especially if they’ll have to spend money to remodel it. Keep things fairly neutral in the lead up to a house sale to attract more offers.
4. Kitchen and Bathrooms Stuck in Another Era
While renovated kitchens and bathrooms can increase the value of a home, you won’t get a large return on investment if you do a major renovation just before selling. Minor updates such as replacing old appliances and installing new countertops and cabinet hardware may be enough to breath new life into a tired, old kitchen or bathroom.
5. Curb Unappeal
According to the Journal of Real Estate Finance and Economics, homes with high curb appeal tend to sell for an average of 7 percent more than similar houses with an uninviting exterior. First impressions definitely matter. In fact, how your home looks from the outside can have a significant influence on potential buyers’ perception of its value. Things that need TLC ASAP include:
- Chipped or peeling exterior paint
- Dirty siding
- Overgrown lawn, shrubs and weeds
- Damaged fences
6. A Garage Door and Front Door That Have Seen Better Days
Replacing a broken, weathered garage door can also go a long way in increasing your home’s value. Investing in a new garage door is one of the only home renovation projects that can actually recoup your full investment when you sell — 97.5 percent.
Replacing your faded front door with a new one (or giving it a few coats of paint) goes a long way when it comes to curb appeal and ultimately resale value. After all, it’s one of the first things people see when they come to your home.
7. Choosing to DIY Instead of Hiring the Pros
Handling home repairs yourself may save you money in the short term, but if you’re not a professional, it can cost you big when it comes time to sell. During a home inspection, an inspector will discover any issues. Faulty plumbing, electrical and structural work must be brought into compliance with local building codes. With every badly done project, you risk renegotiating the sale price and shaving off a significant portion of your asking price.
8. Energy Inefficient Home
According to the National Association of Home Builders (NAHB), on average, home buyers are willing to pay an additional $8,728 upfront on a home if it shows reduced energy costs of $1,000 annually. Here are some energy efficiency upgrades to increase your home’s value:
- Add insulation to your attic, crawl space, basement, and exterior walls to help keep your house cool in the summer and warm in the winter
- Install more energy efficient windows; storm windows alone can reduce heat loss through windows by 25% to 50%
- Seal air leaks around floors, walls, ceilings, windows, doors, and fireplaces with caulk, spray foam, and weather stripping
- Perform a tune-up or upgrade heating and cooling systems
9. Location, Location, Location
When it comes to calculating a home’s value, location can be more important than even the size and condition of the house. When appraisers determine how much value to assign based on the location of the house, they’re looking at three primary indicators:
- The quality of local schools
- Employment opportunities
- Proximity to shopping, entertainment, and recreational centers
10. Proximity to Certain Facilities and Businesses
Studies show that living nearby certain businesses and facilities can drive down property values. Being in close proximity to the following are associated with these drops in property value:
- Poorly-rated school (22.2 percent)
- Homeless shelter (12.7 percent)
- Cemetery (12.3 percent)
- Funeral home (6.5 percent)
- Power plant (5.3 percent)
- Shooting range (3.7 percent)
- Hospital (3.2 percent)
If you’re planning to list your Austin home, the best way to know what you can expect in terms of resale value is to contact one of our real estate agents who knows your market well. They’ll help you compare your home to all the homes that have recently sold to help define its value. You’ll then be able to make an educated decision before you start a renovation that could affect your biggest investment.