Generally, I enjoy watching HGTV. It’s terrific for ideas on staging, updating, landscaping. But please, remember this is entertainment…and some of the advice given is really BAD, in my opinion.
One of the worst shows, IMHO, is My House is Worth WHAT.
My House is Worth What features a real estate agent taking on the role of an appraiser, and homeowners discuss borrowing more money based on these “expert opinions.” They are told, without any kind of disclaimer, that if they spend more money and do “X” they will see many thousands of dollars back on that investment, making their home worth $50,000 to $100,000 more…
After a quick tour, the “expert” says “If I were to put your house on the market, I would list it for….” and then the homeowners are either crestfallen because it came up “short” or they’re “elated” because NOW they have the green light to spend more money on their house!
They never mention that the listing price is often quite a bit higher than the selling price – and a mortgage appraiser is probably going to be more conservative about the value of those upgrades. Additionally, there are thousands of dollars of seller’s closing costs which will also come out of that sale price.
Here’s my Tuesday Tip: If you’re selling your home, avoid doing any major remodels or upgrades unless really necessary. Be sure you can afford the improvements without going further into debt and sacrificing too much equity!
Also, beware of “over improving” for your neighborhood…it’s difficult selling a $350,000 property surrounded by $120,000 homes.
Buyers don’t walk into a home and say “Look, honey, granite counters and stainless steel appliances! They spent $35,000 on this kitchen! Let’s offer $50,000 above the asking price ’cause it’s so pretty!” In this market, they’ll likely start out at $100,000 below asking price to see how “flexible” or “desperate” a seller you are!
Remember, real estate agents are not appraisers. We can give you educated opinions – but they are only opinions. And yes, Virginia, even real estate appraisers make mistakes.
A Pike County home sat on the market for about two years – appraised at $475,000. I have no idea how that appraiser came up with that figure – but hey. The home eventually sold for well below $300,000. I know of another that “comps out” at $160,000, but the homeowners were given an appraised value of $240,000. Thankfully they didn’t refinance for that amount!
If you want to renovate/remodel for your own pleasure – go for it. Do what you want to your home to make it YOUR home – just be aware that you may not see as much of a return on that investment as these television shows may lead you to believe. HGTV is not educational – it’s entertainment.
So, what kinds of things should you do to prepare your home for sale? Coming soon!