Whaddaya Think?

By: Anessa Cohen

While buying a home in move-in condition is always ideal, leaving the buyer with little else to worry about other than where to place his furniture, what about those buyers who can’t afford a home that is in move-in condition and end up having to do renovations?

A home buyer that takes on a major renovation project needs to make a lot of decisions even before making an offer on the house. When considering such a project, the prospective buyer has to take into consideration what the finished market value will be as compared to what his costs are, meaning the price of the house plus the cost of the renovations.

Usually, when dealing with a customer who is looking to take on such a project, the first question they ask is: “What do you think it will be worth when I’m done with all the renovations?” I could easily say, “It will be worth a fortune when you’re done!” or something along those lines, which is what the buyer wants to hear. But I’ve learned over the years that the finished value of a property always depends on facts they’re not taking into consideration. For instance, a large part of that value will depend on their personal taste!

What happens when, during renovations, the buyer decides to renovate the house in a manner that only he likes and might have a detrimental impact on the resale value of the home? If I told him the house would certainly be worth X when he’s done (assuming he is renovating the house in a tasteful fashion), only to find out that he was a little “too creative” with his designs and his creativity lowered the market value of the home. How would I explain this when they finished the project and invited me to behold their creation and asked me, “Whaddaya think?”

I would probably mumble my response since what they created left me speechless.

“How bad could it be?” you ask. Years ago, I sold a house that basically needed only a coat of paint and a new kitchen, at which point I felt it would be worth much more than the cost of putting in the kitchen and painting. When the buyers called me to see their finished product, I came into the house expecting something beautiful only to behold a room full of royal blue kitchen cabinets and matching countertops. My thought was, “Who will buy this if they decide to move before it finally falls apart?” The homebuyers were obviously so in love with their kitchen that all I could say was, “It looks so new and clean.” Thankfully they didn’t seem to notice any hesitation on my part.

Recently I was invited into the home of someone who had renovated and wanted me to see their renovations. As I walked through the house, they showed me the kitchen with all white cabinets (yes, easy sell in the future), but as I looked down, I realized that they had installed lavender countertops with iridescent sparkles. I cannot begin to imagine where they found them, but they obviously loved them, so I figured that if they sell, countertops are not so hard to change.

Then I looked around, expecting to see a lovely eating area where we had seen one when we viewed the property, but all I saw was a wall and no place for a table and chairs to sit in this kitchen (which I knew cost them a fortune).

“Where’s the eating area?” I asked. “Oh” they remarked. “We didn’t want to spoil the new kitchen with a table and chairs so we put the eating area down the hallway and put up this wall with a window so we could use it as a den instead.” “Really,” I said. “And how far down the hallway is the eating area?” I truthfully could not see it anywhere. “Just keep going to the end of the hallway, and then turn right towards the living room,” they answered. The fact that I needed directions to find the eating area says it all!

The moral of this story is if you’re buying a house that needs renovations and you plan on staying there for 30 years, you can go in any creative direction that suits your taste and lifestyle. But if you’re renovating the house with the idea of selling it after a few years, it’s important to create a property that looks advantageous to the majority of homebuyers when searching for a house with the best market value. Consulting with an architect or interior designer before you renovate will pay for itself in the end in the additional market value that can result from selling your newly-renovated dream home! 

Anessa Cohen lives in Cedarhurst and is a licensed Real Estate Broker (Anessa V. Cohen Realty) with over 20 years of experience offering full service residential, management, and commercial real estate services in the Five Towns of Long Island as well as in the tri-state area. She can be reached at 516-569-5007. Readers are encouraged to send any questions or scenarios by email to [email protected].