Resale value is often misunderstood and rarely on the "checklist" of new home buyers. It's misunderstood because most buyers think that if they can buy low, that they'll be able to sell high. If they get a smokin' deal on a property, they're bound to be able to get a reasonable return on their investment right? Well, that's wrong in several cases which I'll go into. Every home buyer should have an understanding of what "resale value" is, how to maintain it and what to look for in each and every home they're considering.

Ok, now we've gone through what to avoid in assumed resale value, now, let's understand what you need to be looking for. Still, you need to be savvy understanding home values within your geographical search. Still buying at or below market value will give you your best return, but beyond that, you need to understand what kind of "upward mobility" your home has compared to the remainder of the neighborhood. Upward mobility is the difference between the highest valued home in the neighborhood and where your home is currently valued. If the difference is high, i.e. you're living in one of the cheapest homes in the most expensive neighborhoods, you're in great shape because you have to ability to add value to your home to get it in line with higher valued properties. Even without doing much work to your home, if the neighborhood remains desirable and prices continue to edge upwards, your home will rise in value at a greater clip then those in less desirable neighborhoods. Remember, rising waters float all boats. It's better to buy a $200,000 home where average home prices are at $300,000, than it is to buy that $300,000 home in the same neighborhood.
Resale value is all about appealing to the largest cross section of buyers. If you can appeal to 80% of home buyers with a 3 bedroom, 2 bath, 2000 square foot home, then why would you purchase that 2 bedroom 1 bath home because it was a sweet deal? If you're thinking about resale, you need to think about who will be most likely to purchase the home. If you could see most average families living there, then you're on the right track. Make sure the home you're considering has enough space, but isn't so large that it's unmaintainable. Same goes for lawn and landscaping as well. If you're the only lot on the block with a pool, it may appeal to some buyers, but others might see it as a maintenance nightmare. Keep that in mind. Functional obsolescense is a real estate term used to describe unique features that appeal only to a few buyers. The fancier and more unique you get, the less an average homebuyer will be attracted. Keep your upgrades simple and just above average, no need for built in marble statues, bidets, and backyard waterslides.

Jared Reimer is a real estate broker with Prudential Rocky
Mountain Realtors in Northern Colorado.
Real estate is his passion and he always wants to connect with
like-minded and savvy real estate fans.
For more information or to get in touch with Jared, please visit his
website at www.ReimerRE.com or email him
at JaredReimer@ReimerRE.com
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