I was meeting a client for the first time and had been unsuccessful over the phone in “extracting” from her what kind of a home she was looking for. I lined up a few houses to see in various price ranges and, as I would often do, we began with one of the more modest homes on our itinerary. We started walking through the first house and when we reached the bathroom she came to a complete stop. She looked at the pink 60’s tile, the pink 60’s sink and then turning to the pink 60’s toilet she said….. “All I can think about is how many other people before me have used this bathroom… Do you have any newly built homes for sale?”
I had my answer for her, but first some background….
Vera actually began her career as a commercial realtor and only when she had kids did she make the switch to residential sales for the more flexible hours. She liked to point out that in the world of commercial real estate, investors would look for a property’s “highest and best” use as a tool to determine that property’s optimum value. The land may have a gas station on it now, but its highest and best use, given the circumstances and location, may be a flower shop.
Back to our lady in the pink 60’s bathroom – this adage aptly applies to residential houses as well. While a home is only partially an “investment,” every buyer/seller out there needs to ask, especially in a seller’s market like we are witnessing today, “what is this home’s highest and best use?” Maybe one shouldn’t dismiss a home because of the small dining room; a wall could be opened from the kitchen to the larger living room and “voila” problem solved. Maybe don’t focus on the crazy wallpaper; there are painters out there who can handle that. I have witnessed many cape cod homes transformed into center hall colonials. And so on and so forth, every home has the opportunity for a second chance, a restoration.
But as it turns out, as was true for the lady in our bathroom, not everyone can easily imagine what a finished room/house may look like based on a description and even if they can envision it, maybe they aren’t inclined to embark on a long, onerous construction project. Architects, township permitting, construction financing and engineering reviews are just a few of the hurdles. These buyers will usually end up with a home that has already realized its highest and best use – newly built or renovated.
For those more adventurous types, discovering and understanding what a home restoration/renovation entails always begins with the help of professionals. The right contractor, architect and experienced designer can help you envision the full potential and scope of work. Many of my clients, whether buyers or sellers, will ask me to introduce them to the best local professionals available and they will insist that I be a part of the meeting as well to bring a market perspective on things. While you may have grand ideas, keeping an eye out to the future marketability of this asset is vital.
It’s important to note that some buyers are looking for “character” and love the feel of an older home rather than starting from scratch. There is also an added bonus – existing homes often have a lower tax profile than new construction. Stay tuned to the ever burning issue of property taxes!
Nechama Polak is the Broker of Record and Owner of V and N Group LLC. V & N Realty is located at 1401 Palisade Ave in Teaneck, NJ. Feel free to email Nechama at email@example.com or call 201.826.8809.