Litchfield County Real Estate Talk, is that an update, an upgrade, or was that merely maintenance?
I hear it all the time, I put a new roof on, new siding, new furnace, the dreaded new septic, so THAT will certainly add value to my property, right? I mean, after all, I upgraded…. right?
Are these updates or maintenance?
You won’t get your money back for putting on a new roof, or replacing a failing septic or a furnace that blew… nope, sad to say but you won’t. Not in the way that you think.
You and your neighbors home started life as identical dwellings. Over the years your neighbor has done nothing, the house has the original roof, original septic, original heating system, on and on. The house shows wear and tear. But you put a new roof on, you replaced the failing septic and heating system. (But otherwise the homes are still the same) I will give it a bit more value for condition, you will be more marketable, more sale-able. But dollar for dollar, you won’t get it back. That is routine maintenance that should have been done. The good news? Your neighbors house, with all the deferred maintenance, is worth less than yours!
When an agent tries to sell me on the fact that the house had upgrades, a new roof, a new furnace, a new septic, I tell them that is maintenance, routine maintenance. It may make the sale easier, but a new septic doesn’t warrant a $25,000 price increase over an identical home with the original septic!
It does work in reverse however. I will say, if the septic is shot and the price to replace it is $25,000, I can pretty much guarantee that the sales price will reflect that $25,000, even if the asking price or the offered price didn’t reflect it in the first place.
Upgrading, updating, that would be a bit of a different story. A home that has a new kitchen, complete with granite counter tops and stainless steel appliances is certainly more valuable than the house next door with the original kitchen from the 70’s. Bingo, you are at the head of the class! Now you are worth more!
That was my long answer, now here is my short answer. There is only so much value we can give your house, no matter what you did to it. Style, size, location, market conditions, these all come into play. I cannot use a 4 bedroom, 2.5 bath colonial built in 2005 as a comp against a ranch built in 1970, no matter how many updates and upgrades were done. After all, a t-bone steak is worth more than a rib eye steak! But the good news is, there are many people that will be happy with rib eye at the end of the day!
Yes, make sure you maintain your house, that deferred maintenance may cost you a bundle when you go to sell. And when you have upgraded, you will see an increase in price, but not dollar for dollar!
Originally posted at Update, upgrade or merely maintenance? And what is the difference?