Recently my neighbor across the street was telling me about some of the updates he’s done to his home in the last few years. He said wanted to extend the entire outside wall of his master bath about 1-2 feet in order to install a larger tub. It clearly was not a cost-effective renovation and it certainly would have not added value to the home. I suggested that he would be better off just tiling up the entire shower area at a third of the cost and the reason was based on a reality I have talked about for some time.
We live in a 15 year-old neighborhood in Prairieville with homes ranging from $180,0000-$205,000. In the last several years, this price range has become quite saturated with new construction from several national builders like DSLD and DR Horton. These new houses boast many prime amenities, such as tankless water heaters, stainless appliances, stone counters, wood floors, and high-efficiency construction to drive utility bills down significantly. This is our competition. When locations are equivalent, there really are just two choices – you can update your home to meet or exceed the spec home standards (thus making it more custom) or pricing your home more aggressively to reflect the need for updates.
Typically this decision is based on financials – will I recoup the money I spend updating because of the higher price I will demand? Or should I just price lower and let someone else do the work? In this price range buyers have so many choices, and it’s becoming increasingly difficult to convince the average buyer to spend less on a deal if they are not interested in doing a little updating – they can just as easily buy a brand new house for a little more.
I personally lean towards the idea of updating an older home to compete with the new construction. Once the homes are comparable, then its easier to sell the other aspects of your home to close the deal, whether it is a bigger lot, established neighborhood, location, etc. Ultimately, a faster sale and less time on the market means more money in your pocket.
I’d love to hear your opinions!
David R. Madaffari, Realtor
Keller Williams Realty – First Choice
Cell: 225.772.3283 (DAVE)
37325 Market Place Dr. Ste D
Prairieville, LA 70769
Each office independently owned and operated