What Adds Value to Your Property?
It is important to distinguish between functional items which do not add value and contributory (value)
items which might add value.
Functional Items are those things that a buyer would reasonably expect to be in functioning order.
These include integral parts of the structure such as foundations, exterior cladding, roofing, plumbing &
wiring. A defective functional item DEDUCTS VALUE. Conversely a super adequate functional item
DOES NOT ADD VALUE.
For example, a buyer can reasonably expect that when a tap is turned on then water will flow. New
plumbing will give comfort that water will be likely to flow in a trouble free manner for the foreseeable
future but it does not add value. Commonly we are asked whether ‘copper pipes’ add value. They may
be an indication of overall quality but in themselves they are merely part of the plumbing.
On the other hand if a functional item is defective and needs replacement either immediately or in the
very near future then a DEDUCTION is appropriate.
For example if the roof needs immediate replacement or the cladding is inadequate (e.g. Weatherside)
the cost of replacing the defective product with a functional material needs to be considered.
What constitutes Contributory Value?
When assessing whether an item adds value in a certain circumstance you need to consider its effect
with reference to the comparable sales being used in the analysis (i.e. the item cannot be considered
in isolation).
Items that add value are generally those features that either none of the comparable properties
possess or are far superior in terms of quality (i.e. super adequate).
For example the subject property may have a particularly nice in ground pool, additional outbuildings,
extensive decking, superior quality kitchen, air conditioning, central heating, etc.
How much extra do these items add?
Remember the maxim is added value. This is an amount in terms of cost over and above the standard
expected from a similar property in the subject location.
For example if a house owner replaced an adequate ($15,000) kitchen with a super adequate ($50,000)
kitchen, the added value at the most is $35,000 and not the full $50,000.
Low Cost ways to maximize value
If you went to a supermarket, you would not expect the goods on the shelf to be dusty, battered, past
their use by date, and generally in disarray? Nor would you expect to fight your way past a snarling dog
to get to the baked beans. If faced with this situation, most folk would likely take their business
elsewhere.
Yet the same individuals, who would criticize the shopkeeper for sloppy or unfriendly presentation,
seem more than happy to show their own home, which incidentally is probably worth more than a tin of
beans, in the manner described above.
Presentation, presentation and presentation
Forget about location, location, location you can’t move your house. However, you can maximize the way
your house looks.
Most of these items can be achieved at little or no cost, yet have the potential to add thousands of
dollars to the bottom line of your sale.
It is important to distinguish between functional items which do not add value and contributory (value)
items which might add value.
Functional Items are those things that a buyer would reasonably expect to be in functioning order.
These include integral parts of the structure such as foundations, exterior cladding, roofing, plumbing &
wiring. A defective functional item DEDUCTS VALUE. Conversely a super adequate functional item
DOES NOT ADD VALUE.
For example, a buyer can reasonably expect that when a tap is turned on then water will flow. New
plumbing will give comfort that water will be likely to flow in a trouble free manner for the foreseeable
future but it does not add value. Commonly we are asked whether ‘copper pipes’ add value. They may
be an indication of overall quality but in themselves they are merely part of the plumbing.
On the other hand if a functional item is defective and needs replacement either immediately or in the
very near future then a DEDUCTION is appropriate.
For example if the roof needs immediate replacement or the cladding is inadequate (e.g. Weatherside)
the cost of replacing the defective product with a functional material needs to be considered.
What constitutes Contributory Value?
When assessing whether an item adds value in a certain circumstance you need to consider its effect
with reference to the comparable sales being used in the analysis (i.e. the item cannot be considered
in isolation).
Items that add value are generally those features that either none of the comparable properties
possess or are far superior in terms of quality (i.e. super adequate).
For example the subject property may have a particularly nice in ground pool, additional outbuildings,
extensive decking, superior quality kitchen, air conditioning, central heating, etc.
How much extra do these items add?
Remember the maxim is added value. This is an amount in terms of cost over and above the standard
expected from a similar property in the subject location.
For example if a house owner replaced an adequate ($15,000) kitchen with a super adequate ($50,000)
kitchen, the added value at the most is $35,000 and not the full $50,000.
Low Cost ways to maximize value
If you went to a supermarket, you would not expect the goods on the shelf to be dusty, battered, past
their use by date, and generally in disarray? Nor would you expect to fight your way past a snarling dog
to get to the baked beans. If faced with this situation, most folk would likely take their business
elsewhere.
Yet the same individuals, who would criticize the shopkeeper for sloppy or unfriendly presentation,
seem more than happy to show their own home, which incidentally is probably worth more than a tin of
beans, in the manner described above.
Presentation, presentation and presentation
Forget about location, location, location you can’t move your house. However, you can maximize the way
your house looks.
- Before showing your property, ensure that the grounds are clean and tidy. The grass is neatly
mowed and any rubbish, car wrecks and associated demolition material are removed to the
local land fill. - If you have an outdoor pool or spa, either have it filled with clean water or if empty have it washed
down and clear of leaves and debris. - If you have a family pit bull or other four legged ankle biter, consider relocating them to the local
kennels for the duration of the marketing program. Remember mans best friend is the buyers
worst nightmare. - Clean down the exterior of the house, paintwork and guttering. Consider spot painting if
necessary. - Ensure the interior is clean and fresh.
- Remove the clutter. If you have excess furniture, hire a storage unit for a month or so.
Uncluttered areas give a greater sense of spaciousness. - Check the wet areas such as laundry and bathrooms and if there is mould growth, treat with a
commercial mould inhibitor. Note that if there is extensive mould growth it may be an indication
of a more serious problem such as water ingress from another source such as a leaky roof.
Have this checked out by a builder or plumber. - Do the simple fix up jobs we all like to put off for a rainy day. Replace those tap washers, re-
attach the rickety shelves, free up sticky locks, lubricate squeaky door hinges, free up reluctant
windows latches, etc. - Ensure that the kitchen and service areas are clean and fresh with particular attention to the
stove cleanliness. - If the curtains and drapes are old and dusty, consider having them commercially cleaned.
- If you know that there are to be people coming to view the property or there is an open home
scheduled, consider cooking a batch of scones, or burning some vanilla essence in the stove.
These aromas can impart a homely feeling. - If you are presenting the home in winter, have the house heated and warm and have the lights
on.
Most of these items can be achieved at little or no cost, yet have the potential to add thousands of
dollars to the bottom line of your sale.
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| Advice to Sellers |
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Innovation + Experience |
| PO BOX 9018, Wellington 6141 | phone: (04) 240-0124 | fax: (04) 232-4414 | email: valuer@ vcnz.co.nz Innovation + Experience |