Call For Opinion - Are today's buyers willing to pay more for uprgades?

Asked by Dave Osborne, Orange, CA Mon May 12, 2008

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Jacqueline W…, Agent, Irvine, CA
Mon May 26, 2008
Not necessarily! As a Seller, you need to first determine the target sales (not list) price for your home and then decide if the cost of upgrading is worth it. For example, I believe it would be better to price your home $70k below the last sale and create demand for your home vs. spend $70k upgrading your kitchen. Most likely, you will not recoup that expense in this market. Appraisers are now being very conservative and seem to allow almost nothing for upgrades when comparing one property over another! There are however a number of minor upgrades you can do that improve the marketability of your home and allow you to put your best face forward.....just don't expect to tack the $$ spent onto the price of the home:-)
3 votes
Oc Buyer, Home Buyer, CDM
Tue May 13, 2008
As a first time buyer who has been on the sidelines for years just aching to have a home, but left to dream and watch improvement videos, I really wanted a house that wasn't totally done up already. My preference was to pay less and then spend the savings on improving the house. We wanted good bones and to not have to replace roof, wiring, plumbing, etc... essentially, we wanted a good priced cosmetic fixer. I would have liked to have had the windows already replaced, but all the homes with new windows also had everything else new in them.

We closed on our house on Friday and the last three days have been long with work, but it's been a blast for me. Appliances arrive today, new flooring and baseboards go in on Thursday and we move this weekend. Then I get to spend the summer landscaping and putting in pavers, installing molding, replacing a few doors, installing a mantle, etc... I'm so looking forward to my projects!
1 vote
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Tom Pelton, , Yorba Linda, CA
Mon May 12, 2008
I remember the days when upgrades were a hot item in Yorba Linda homes. Not any more. Two things have changed. First, upgrades have become so personal, buyers would rather customize with their own rather than buy someone elses upgrades. In fact, ofteh they'll think they are paying extra for the upgrades because of the additional appeal. Second, with so many homes on the market , it's all about finding a good deal with good "bones" A home just needs to be clean and in good condition. Often, homeowners who have invested a lot of money upgrading a home have a hard time being realistic about price in today's Buyer's market. They are very proud of the work they have done and very aware of the money they have invested in the home. Unfortunately, these days you won't get out of a home what you put into it.
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1 vote
Vicki Lloyd, , Lake Forest, CA
Mon May 12, 2008
I just conducted a poll on my blog site, and found that some buyers will pay extra for some upgrades, but won't for others. Replaced windows, new cabinets, and granite counters seem to add value. Tankless water heaters, new furnaces or A/C, new roof, make buyers feel better, but don't really add to what buyers will be willing to pay. (Of course, this was all hypothetical, and not subject to the emotional "WOW" factor that buyers sometimes get when they walk in to a really great house.)
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1 vote
Keith Jones, Agent, Seal Beach, CA
Fri Nov 30, 2012
All things being equal, in the broadest sense the answer is “YES”. However as it applies to any specific home, all things are not equal and you may have to ask yourself more questions.
The first question is “What upgrades?” Some add more value than others.
“More than what? “Is also a key question. More than Market Value? Probably not.
Another question is “How would the upgrades compare to the comps?”. If most of the homes in the neighborhood have been “upgraded” then we’re not really talking about an upgrade, it’s more of a “catch up-grade”. In this situation, you can expect a home without the improvements to sell for less. Understanding how much less would help you determine whether it is worth the expense.
A word of caution, make sure that you understand what drives value in your neighborhood. Often home owners will do improvements hoping for a sale price equal to homes in a nearby, more expensive neighborhood. (“I can make my house just as nice as the homes in the tract across the street that sell for a lot more…). The problem is that much of the price difference could be based on the fact that people are willing to pay more to live across the street. Since an upgrade will most likely not include moving the house across the street, you shouldn’t expect the same value.
0 votes
Melissa Chel…, Agent, Orange, CA
Fri Nov 30, 2012
I absolutely believe "YES" is the answer to this question. With inventory low and bidding wars on fixer-uppers, the fully upgraded house is going to get top dollar. Most buyer's are still looking for a home at the top of their budget, and ideally, every buyer I have worked with in the last 12 months is looking for a turnkey home.

For month of the November, ending today, the average 3 bedroom in Orange sold for $475,000 and the average 4 bedroom sold for $596,000.

If you have a home you would like me to sell I would love to run a free market analysis report for you!

Melissa Chelius
OC Signature Properties
CA DRE#01887852
0 votes
Sandra Carli…, Agent, Newport Beach, CA
Wed May 21, 2008
The buyers I've been working with won't necessarily pay more for upgrades, but if there are 3 homes that will fit their needs and the homes are similar in price, size & location they will make an offer on the one with the most upgrades (that they like) for the price. While the home isn't necessarily worth more than the comps because of the upgrades, it may help it sell before another.
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0 votes
Tameko Tsune…, Home Buyer, 92646
Wed May 14, 2008
I think vicki's answer is REALLY interesting.... because I hate the idea of paying someone to pick out my cabinets and countertop, whereas I DO care if the place has up to date wiring, plumbing, how old the roof is .... Actually I'm very picky about improvments, I don't much want to pay for any improvements that I don't like. I mean what if you put in granite counters but they're grey and I wanted black? or what if hte roof is brand new but its cheap and not going to last? I would rather shave the money you spent on that off the cost of the property and choose my own roofer and material. Pretty much true for anything. Upgraded windows are nice though and not too non standard. AC is nice too, If its already installed then I know it won't be a hidden cost (cost of installing ac can vary MADLY)

But I know other people who want to walk into a place that looks 'finished' and buy it, which seems to mean basic newer floors, new bland paint on the walls, and generically nice fixtures in the kitchen.
0 votes
Swelman, , Costa Mesa, CA
Tue May 13, 2008
In this current economy price is the biggest appeal. California is already a high price market even with the values currently falling. I think a lot of future buyer who got priced out during the speculative frenzy a few years back are waiting for reasonable price levels again. It's not rocket science some of the values in past years didn't make sense. Some apartment sized condo's were selling over 400k now there are SFH selling in that range. Most of us are willing to upgrade over time so price and seller covering closing cost are big conciderations. You can always improve your home over time.
0 votes
Sylvia Barry,…, Agent, Marin, CA
Mon May 12, 2008
Yes, they are, if the house has many nice upgrade - like Viki said, double pane windows, hardwood floor, granite kitchen, recessed lighting, updated kitchen / bath, great location, travertine tiles, high end hard wares, etc. Either big fixer with low prices, or nicely updated hoome that still demand a premium (not as much as before, but still a premium and quicker sale)

0 votes
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