Today, Sacramento Real Estate Voice has a guest writer. Ryan Lundquist is a Sacramento appraiser whom I have asked to join us today with a special article I hope you all enjoy….take it away Ryan.
The big news today was that Lebron James would be moving on from the Cleveland Cavaliers to the Miami Heat. Even if you’re not a sports fan, you’ve probably heard of LBJ’s drama of team selection since it’s been dragging on now for months.
Call me a real estate geek, but beyond the impact to the NBA, the first thing I thought of was Lebron’s mega-mansion in Ohio. What is he going to do with it when moving to Miami? Are there really any buyers in the Cleveland market looking for a 35,000 square foot 11-bedroom property that includes a bowling alley, casino and barber shop?
Let’s give some perspective to the sheer size of this beastly home. One acre is 43,560 square feet, so Lebron’s house is 0.80 acres. A typical house in the Sacramento area might be 1,400 square feet in size, which would mean Mr. James’ home is exactly 25 times larger. A fairly common lot size in Sacramento is 0.14 acres or 6,098 square feet. In effect Lebron’s house would cover six entire parcels.
Can you say “over-improvement”? In real estate terminology, this is when the improvements on a property are excessive in comparison with the improvements of similar properties. Lebron’s house is very unique for sure, but ultimately its overbuilt for the market because it’s certainly excessive in size.
Here’s the point. If you’re considering remodeling or improving your house, think about resale value and what will be most acceptable to a pool of typical buyers in the future. You should certainly retain your sense of style and update your property to enjoy life, but don’t over-improve so you never get your money back or add features that are going to turn away buyers in the future. For example, a $100,000 kitchen remodel in a $250,000 neighborhood is likely an over-improvement because your house probably won’t sell for $350,000. Or if you double your square footage, you’ll be hard-pressed to get your money back in the market when your house is extraordinary larger than any other house in the neighborhood. The lower-priced sales around your property will not help boost your home value. Or if you paint your house bright sunburst orange, pave over the front yard to create a six-car driveway, or display your prized collection of 300 garden gnomes in the front yard, you’ll have to ask yourself if these are really marketing points to buyers.
What have you seen a home owner do to a property that might negatively impact its resale value? What type of improvements do you think really help a home owner sell and gain maximum price in the market?
Guest Post by Ryan Lundquist
Thank you Ryan, for sharing an excellent real estate tip for homeowners who are thinking of remodeling and improving their homes. This real estate information will help guide the homeowner before spending and over valuing their homes. Nothing like spending money to improve your home only to find that when you place your home for sale you didn’t bring in a higher value.