If you had to sell your home today, could you? The liquidity of your home is seldom considered until you want or need to sell the home. Unfortunately, your home may not provide the return that you expected—especially if you have not maintained and upgraded the property along the way.
A Broker Who Understands Investment
Recently I had the opportunity to return to one of my childhood haunts. The parents of my high school friend called me because it was time for them to leave behind their two-story, five-bedroom home and buy a place that better suited their empty-nester lifestyle. The house had not changed a bit; great for nostalgia but not so great for selling.
In the family room, they had kept the rich walnut paneling that surrounded the classic cast iron woodstove where we used to gather around. The gold linoleum on the floor was so durable it still looked almost new. In addition to the family room, they had built a bonus room in the former garage.
The home is often a family’s largest financial investment. Although you may have no intention of selling anytime soon, the investment should always be poised for success in the event circumstances change. For example, medical bills might need to be paid by taking a second mortgage. In this case, the lender will send an appraiser to assess and verify that the home is sufficient collateral for the additional debt. A job loss may require that the family downsize quickly by selling their home and going into more affordable housing.
Keeping Your Home Ready To Sell
A home that has not been well-maintained and updated when put on the market cannot compete with the other homes of similar size. In order to attract a buyer, you will have to discount the price by more than the actual cost of repair and updating. As a result, you will not get the return that you had hoped on your investment.
Home maintenance is critical. When have you last had your ductwork cleaned or your roof inspected? Bite-sized maintenance year around will keep most projects manageable and affordable. If the roof inspector sees less than three years life remaining on your roof, you have some notice and time to plan for the expense.
Once every two years, have your Realtor review your home with an eye toward resale and request a market analysis so that you understand the opportunity and capacity of your home as an investment. When considering updates or remodels, have your Realtor participate in the plans to confirm that you will see a return on the money spent at the time your resale.