The 4,200-square-foot lakefront property Mark Parrish listed last August seemed like any home buyer\u2019s dream. Twenty minutes outside of Minneapolis, it was more spacious than most comparable homes in the neighborhood, with four bedrooms and four baths, and had unobstructed water views. Though the basement was unfinished and the kitchen needed some updates\u2014the cherry wood cabinetry and flooring had fallen out of fashion\u2014Parrish felt confident the home\u2019s attributes would overshadow its weaknesses. Still, it took eight months and about 20 showings for his sellers to get their first offer in March\u2014and it was $45,000 below the $629,900 asking price. In a market where homes in good condition generally sell quickly, the sellers, relieved to have found a buyer, accepted the offer.<\/p>\n
It would be easy to blame a seasonal slowdown in the market for the languishing sale. But Parrish, GRI, a sales associate at Lakes Sotheby\u2019s International Realty in Edina, Minn., says the sale became more challenging because of a development of about 200 newly constructed homes a couple of blocks away. The properties in the brand-new community reflected the latest styles in flooring, lighting, and countertops, among other items. And that made the outdated look of his sellers\u2019 home, built in 2004, even more noticeable to buyers, Parrish says. \u201cPeople are blinded by the white plank floors, gold light fixtures, and quartz countertops you often see in new construction,\u201d Parrish adds. \u201cIf buyers look online at your listing and see dated cherry cabinets and flooring, and they go to the next house and see white marble\u2014if you\u2019re not willing to make that change, it will be reflected in your price.\u201d<\/p>\n
Though a home\u2019s design and style is not always a make-or-break issue for the sale, most buyers likely will factor it into their purchase decision, especially when choosing between resale and new construction. When you help sellers in areas with alluring, newer units nearby, you\u2019ll be battling a common perception that existing homes aren\u2019t as desirable as new ones\u2014even if your listing is in pristine condition. So it\u2019s wise to help sellers modernize their home\u2019s look to make it more competitive.<\/p>\n
Small upgrades, such as adding a fresh coat of paint, switching out old kitchen and door hardware, or incorporating aesthetic details specific to your region, can give listings a newer feel, says Josh McNair, broker-owner of Geist Realty in Indianapolis. But big-ticket items, such as energy-efficient appliances, new countertops, and bathroom remodels, may be the most important upgrades sellers can make because most buyers can\u2019t afford them on top of a home purchase, adds Terrylynn Fisher, CRS, GRI, a professional stager and associate broker with Dudum Real Estate Group in Walnut Creek, Calif. Sellers also can add smart-home features that enable owners to control thermostats, lighting, and door locks from their smartphone to draw buyers\u2019 interest, since those amenities are becoming standard in new developments.<\/p>\n
Not all sellers, though, are willing or able to pay thousands of dollars for improvements. In that case, lowering the list price may be the best way to gain an edge over newer homes. \u201cEveryone knows you pay a premium for new,\u201d says Christine Rae, founder of the Certified Staging Professionals International Business Training Academy. \u201cYou pay not just for the property itself but also the developer\u2019s costs and marketing investment. So new generally means more expensive.\u201d And that could be the most important factor in a budget-conscious buyer\u2019s decision-making process.<\/p>\n
Still, don\u2019t underestimate the impact aesthetics can have on the value of both resale homes and new construction. Here are some top considerations for marketing older homes in areas where sparkling newcomers are springing up around them.<\/p>\n
Advantages<\/strong><\/p>\n Investment in curb\u2014and backyard\u2014appeal.<\/strong> Many sellers have added amenities, such as pools, decks, and porches, and worked with professional landscapers, painters, and contractors to make the look of their home more upscale, Fisher says. This means buyers won\u2019t have to spend extra money on these items. Developers of new homes, on the other hand, often make a barebones investment in curb appeal to control costs, she adds. \u201cBuyers sometimes have to landscape the backyard and add window treatments, which can give them sticker shock.\u201d These extra costs may include planting grass or laying sod as well as planting trees and other shrubbery.<\/p>\n Better lifestyle options.<\/strong> Many resale homes are closer to schools, shopping, restaurants, and public transportation, which is a big plus, McNair says. \u201cNew construction usually takes place on the outskirts of town, where agricultural land is being developed into housing subdivisions,\u201d he adds. Clients who strive to live in a neighborhood with a certain feel may find more options in existing communities with a developed sense of community.<\/p>\n Individual charm.<\/strong> \u201cOlder properties usually have character that is lacking in new builds,\u201d Rae says. Many resale homes have historical features and flourishes that add extra appeal, as well as more mature trees and larger lots that offer more privacy. New homes tend to be built closer together on smaller lots, where \u201cyour neighbors are looking into your yard,\u201d Rae adds. Construction shortcuts sometimes result in flaws that come to light after the owner moves in. Much of the time, adds Fisher, \u201cYou\u2019re going to have a more substantial house in an older home because it\u2019s had owners that have cared for it.<\/p>\n Disadvantages<\/strong><\/p>\n No customization options.<\/strong> Buyers may have to compromise more on a resale home, McNair says, because major details such as floor plan, lot size, and interior finishes often can\u2019t be changed. And if they can, it will require a sizable investment. With new homes, however, buyers can work with the builder to customize these options before and during construction. Customization may come with added costs, McNair points out, but it likely won\u2019t be as expensive as doing a major remodel on an existing property.<\/p>\n Difficulty retrofitting green features.<\/strong> Demand for eco-friendly homes is growing quickly, and features such as energy-efficient appliances, HVAC and electrical systems, and windows are becoming standard buyer expectations. While more developers are including these items in their builds, many resale homes may not be able to be outfitted with entirely new systems, Rae says. So buyers who are looking for ways to lower their utility bills may find better options in newer communities. Another benefit: New-home buyers won\u2019t have to worry about wiping a previous owner\u2019s data from a smart product.<\/p>\n Stale design.<\/strong> Some sellers won\u2019t keep the style of their home current. Despite the best advice from their real estate professional, these sellers won\u2019t remove dated carpeting or add fresh details such as new ceiling fixtures, kitchen backsplash, countertops, hardware, and bathtub glazing, Rae says. While an incoming buyer can fix these issues, it\u2019s a burden. New homes, by contrast, hew more closely to trends and won\u2019t require cleaning up a previous owner\u2019s design disaster, Rae adds.<\/p>\n