Kudos’s to Roger Miller for coming up with a statement so descriptive. It really is impossible to take a shower in a parakeet cage. It is also impossible to give an accurate answer to some questions posed by buyers.
Just the other day, I was showing homes to a buyer in Washington, DC. She had brought her mom along to view the homes. Moms and dads are always welcome. I am a dad, married to a mom and I know how we parents want to be sure our children are not being taken advantage of or rushed through any life changing purchase. (For you adult kids reading, no, it is not a control issue. We have done this before and just this one time please allow us to use our experience.)
Back to the showings. We visited on particular row home. It was located in the most northern tip of South West, blocks from the National’s Ball Park. Signs of the gentrification that has washed over the eastern side of DC were plentiful. The slow but steady tide of homes redone and blocks becoming neighborhoods were in evidence.
Personally, I think the swath of blocks between the rivers and and referred to as “Southwest Waterfront, Buzzard Point and Near Southeast” are prime areas to see increased property values. The future addition of a soccer facility will bring even more amenities (shops, restaurants, pubs and parks). Even if the soccer deal falls through, these neighborhoods have Metro access, the waterfront, the parks in the old Navy Yard area and easy access to interstates and bridges to Virginia. Great locations.
Now, one row home we visited was obviously purchased and remodeled and put on the market. It seemed that there were three homes in a row that had all been redone. New kitchen, new bath, new windows and new walls. I visit hundreds of renovated row homes and condos in the course of staying on top of the market, and this unit was very well done.
The homes that had been renovated were pristine inside and out. The neighbor’s, not so much. As we looked out the upstairs window, “Mom” shared, “Oh dear God, is that a large dog pen next door?”. I walked over and turned my professional eye on the neighbors back yard. Sure enough, there was a wooden structure as wide as the home and about 8 feet deep, featuring a ramp to a 4X4 trap/front door. There was a large chain, one end bolted to the ramp and the other disappearing behind the trap door. (Even the most artful “puffery” could not describe it as anything other than something that housed something that needed to be chained.)
The rest of the small yard was filled with over flowing black trash bags. OK, let’s be honest, without further information, it looked horrible and left all of us wondering what sort of neighbor might be living next door.
So Mom asks, “If my daughter buys this house, what can be done about that?”.
I don’t know. I do know the city has zoning codes, etc.. I also know that you can not predict the future or your daughter’s experience based on the contents of a neighbor’s yard. There are as many different explanations as there are neighbors.
Then Mom hit me with another, “What do you think my daughter would have to pay for this property? She has to be sure that if she buys it and then loses her job, she would be able to sell it quickly without losing any money.”
I smiled my best “I am a professional smile” and held up one finger.
“Let’s stop right there. While we are all aware that right now, DC is going through a period of rising prices, nothing lasts forever. If we have learned nothing else in the last 10 years, we have learned that home prices have become as volatile as stock market prices. Swings in the market value of homes have gone up, down and now back up again. There is no guarantee that the prices will continue to rise or that they will collapse in the near future.
All I can do is advise you of the reasonable market value of the home. I will be glad to help your daughter prepare an offer and I will negotiate in her behalf to get the best deal the seller is willing to offer. If both sides come to a meeting of the minds and a deal is struck, I will assist her in her tasks through settlement. The next day, all bets are off.
I can promise you, in most cases, before the ink is dry on the closing documents, most buyers would have to sell the home for 110% of what they just paid before they would break even.
All other factors being somewhat equal, by purchasing the home, you have identified the market value of the home. Appreciation takes time and in most cases it takes the sale of more homes for a bit more money to occur.”
Mom frowned and said “Well, what if you are able to strike a good deal and she buys it for 10% less than the list price?’
I shook my head. “What ever your daughter pays for any home, anywhere will establish the market value for that home at the time you purchase the home. The list price is just that, the list price. The market value is the price you pay. You are the market.”
She was not satisfied and felt that there must be a way that I could wrangle a guaranteed price from the seller. (There is an old saying that is quite appropriate here “That dog won’t hunt“)
She finally looked at me and stated…”What good are you if you can not tell me how much we could sell the home for if that became a necessity soon after buying?”
Hmmm. This is my answer to her, and anyone wondering the same thing. When I show homes, my clients see a place where they can begin the next phase of their lives. While they are going from room to room, I am pondering “how sell-able is this home going to be in the future?” Their focus is on moving in and part of my attention is on moving out. It is part of my job to measure how the home stacks up against other homes on the market today and to make note of how it might stand up against other homes for sale in the future. The more narrow the attraction, the smaller the size of potential buyers in the future. I try to see the 5 year expenses (beyond renovations). While clients are marveling over the stainless steel appliances, I am taking a peek at the condition of the roof, the HWH, the size of the electric box, the condition of the sidewalk, how the water flows from the roof and lots of other things that are often obscured by the dazzle of a good home stagger. I point out things that may cost money in the future. I point out what may not be an issue today could impact the sale in 5 years. I am not a wet blanket, but I like to think that my relationship with clients will continue well beyond the settlement on the home purchased.
You can not pin point what a home might sell for at any point in the future. No one can. You can’t take a shower in a parakeet cage, but you can be happy if you’ve a mind to. Thank you Roger Miller and Mom, I do my best.
If you would like to have an agent that will represent you, tell you the cold hard facts and be committed to assisting you today and in the future, give me a call. I can easily be reached at 301-509-5111