Office space has become an extremely important commodity. This has become a critical desire that is a “must-have” mainly due to the Covid-19 pandemic. What it has created is the specific demand to satisfy those working at home as well as their children, who whether full time or part time are being schooled and learning via their computers at home.
Those approximately 400,000 families and/or individuals who have left New York City since March 2020, have definite ideas as to what they need and want in what they are looking for in a home.
Due to the increased demand for that group, homes are selling at a much faster pace (if priced correctly) as long as they have what those purchasers need and want. The fact that Long Island and other areas outside of New York City are considered a suburban culture and the buyers have come out of the cacophony of an urban environment, quiet and space have become tantamount for their new lifestyle. Although many schools are not as of yet open full time but working on a shortened or part-time schedule, families are still searching for the most prestigious and highly ranked schools within their budgets, when choosing a community to live within and grow their roots.
In a recent “Kiplinger Report” there are 11 upgrades buyers are willing to pay for that sellers need to be aware of, especially when a home has not been updated in many years. During these unusual times with extremely scarce inventory and truly the most cost-effective financing in 50 years, these upgrades can potentially provide a situation for earning back more dollars than the cost to do them. However, the cost of labor and not the materials is the most critical factor when determining the overall cost of those upgrades, so one must be prudent and cognizant when determining the bottom line.
I have seen people spend an inordinate amount figuring they would be staying in the home an additional five to ten years and enjoy those new upgrades only to end up moving much sooner, due to health and/or finances and thereby not making any money on what was done let alone recouping their total initial upfront investment. Sellers should know that most remodeling efforts only increase home values by 50 percent to 80 percent of the average project’s costs, according to Remodeling magazine’s 2020 Cost vs. Value report.
For example, the average cost of a mid-range bathroom remodel is $21,377. You’d recoup about $13,680 (64 percent) of that amount during a resale. Even though you might have the money right now to make those changes, one must contemplate and minimize the downside by looking at your job and/or business and have a good idea and calculate the possibility of being laid off or that their projected business revenue and profit will be consistent and not necessarily decrease down the line before considering moving forward with any major changes. However, not doing any repairs, improvements or upgrades could also cost you more time and money by having to wait for that one purchaser who would consider doing those things that you didn’t want to do.
But you really need to look at the big picture to determine and weigh the costs of your decision. You don’t want to have buyers ricochet off your home to buy another one that is in tiptop, move-in condition. Inaction may cause your home to linger on the market much longer, while you are still paying your mortgage, taxes, utilities, and especially the cost of heating this winter and whatever additional costs that you are responsible for and the potential reduction in the eventual sale price. This may not be in your best interest to be complacent in not doing what may need to be done.
But these are special and unique times, and our extremely low inventory and the lowest interest rates have helped create and contribute to an abnormal increase in demand. Anything is possible and there will be a calculated risk, but you just might get very lucky and have someone who absolutely needs and wants your home due to your improvements who will pay you a premium enabling you to recoup your outlay of dollars and or even earn you a potential profit!
It’s also about location, location, and the school district that will help you determine and minimize your risk factor, because the better the school district the better the sale price. Eat-in kitchens and bathrooms are definitely the major items that will assist in selling your home in a heartbeat. A well-appointed laundry room is a big plus. Moreover, a nicely landscaped rear yard for barbecues and relaxing are also greatly appreciated and yearned for by potential buyers.
From my many years of experience listening and understanding homeowners’ financial issues and specific “needs and wants,” one must think outside the box to create a situation to be able to do those improvements by possibly asking your children or a close relative for help (I know that you may not be comfortable to consider doing this or are too proud to ask, but remember it’s family, not strangers). It never hurts to seek some assistance and then, if possible, be able to pay them back once sold. Downsizing and reducing the outlay of money that you may or may not have becomes extremely critical and much thought and planning must go into all your decisions. Be pragmatic and practical in deciding what course of action to take will greatly benefit you going forward.
Lastly, after much thought and soul-searching, if you have conscientiously decided to do nothing but basic cosmetic changes — painting, de-cluttering and cleaning –make certain to request a value analysis from your Broker to price your home competitively and, in some instances, aggressively to grab the eyeballs and maximum viewings of those who are willing to do a basic to a total gut renovation. For additional items that purchasers are looking for check out this link to the Oct. 16 edition of The Kiplinger’s Report https://www.kiplinger.com/slideshow/real-estate/t010-s001-home-features-that-buyers-want/index.html
Philip A. Raices is the owner/Broker of Turn Key Real Estate at 3 Grace Ave Suite 180 in Great Neck. He has 39 years of experience in the Real Estate industry and has earned designations as a Graduate of the Realtor Institute (G.R.I.) and also as a Certified International Property Specialist (C.I.P.S). For a “FREE” 15 minute consultation, a value analysis of your home, or to answer any of your questions or concerns he can be reached by cell: (516) 647-4289 or by email: [email protected] Just email or snail mail (regular mail) with your ideas or suggestions on future columns with your name, email and cell number and he will call or email you back.