My email box is filled with people wanting to debate my "the only reason your house hasn't sold is price" statement so I thought I would visit it more in depth.
One of the first things people tell me when they are preparing to sell their home is what upgrades the home has. Typically a home seller wants to increase the selling price of their home in proportion to the amount of upgrades. I can see where this train of thought comes from. If someone spends $20,000 upgrading their kitchen it stands to reason that upon sale, they would like to recoup some, if not all, of the cost. In an older neighborhood this might be a valid argument.
If you are planning to sell a home in one of the newer suburbs of Phoenix, AZ, your home might not be old enough to need a remodel but you might have gone whole hog on the upgrades when you purchased. Do these upgrades justify pricing your home for more then the other homes in your neighborhood? Maybe.
Let's say you live in a subdivision which is less then 5 years old. You have granite counters and stainless steel appliances, travertine floors, Berber carpets and designer ceiling fans. When you purchased the house, these upgrades cost you an additional $30,000. To you, this should equate to selling your home for $30,000 more then the other homes in the neighborhood. Unfortunately, when it comes to selling your home, it just doesn't work that way.
It stands to reason that many other homes in your neighborhood have many, if not all, of the same upgrades. If they do, then your home is basically equal to the other's in your area. Also, with the Phoenix real estate market in its current state, even with every upgrade imaginable, I can almost guarantee there is a distressed seller who must sell and will deeply discount their price to get it done.
Which brings us back to price. If there are 20 homes in your neighborhood for sale which are comparable to yours in size and condition, there is a good chance that price is going to be the deciding factor for a potential buyer. Sure, granite counters and travertine floors are fantastic, but so is a lower mortgage payment.
The upgrades you have in your home might make it more attractive and might make it sell faster but they probably won't be enough to cause someone to be willing to pay substantially more for your home then a similar model just down the street.
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