My town, Oklahoma City

But, but, but I spent....
January 24th, 2011 11:32 AM

    This morning I got an email from a ReMax colleage that was working on a new Oklahoma City listing in a historic area.  The home has a new GeoThermal heat and air system and the colleage wanted to know if that was something that could raise the market price on the house.

    Questions like these are something I get at least once a week.  People love their homes and want them to work exactly the way they choose.  I am the same way.  We are all versions of Sally (Meg Ryan), we want it the way we want it.  To this end we install complex stereo systems, computerized lighting systems, elaborate fountains and lush landscapes.  I know guys that can turn on their porch light on their phone from the casino in Vegas.  Sometimes I think those folks need to learn to focus... but I digress.  All of these things, swimming pools included, are GREAT!  They can be fantastic tools that make living in your home much more enjoyable... for you. 

    The problem is that for the next guy or gal that comes along, they might not matter at all.  There is no way to account for the taste of the next person, and as we all know ideas and opinions do vary.  While my buddy wants to play with his lighting scheme in baggage claim, the next guy may just want The Clapper.  To a buyer all that whiz bang could be a dud and won't matter at all when it comes time to make an offer. 

    Appraisers get caught in the deal too.  People that build new homes (been there) sometimes get excited with the idea of customization (done that) and go overboard spending more than is rational to add coffee machines to the master bedroom, or mosquito systems to the back yard, whatever.  Those costs fall to the bottom line and then I walk in and have to break the news that the house won't appraise for what they can borrow to build.  Unfortunately this little tidbit sometimes comes after the damage is already done and people end up underwater before they ever move in. 

    The problem for an appraiser is that we are forced to use other sales in the vacinity that are similar and not too many homes share out of the ordinary amenities.  (Hence the term: out of the ordinary.)  In order to give these little gadgets real solid value, an appraiser would have to find a number of similar homes both with the given amenity, and without, and compare their sales.  That was the issue with my colleage's listing.  There just aren't many GeoThermal homes in Heritage Hills.  And, since they are rare, one can't do a Paired Sales Analysis (fancy appraisal school phrase) to determine what value they add, if any.  So we can't give them any value.

    As a Realtor, of course we love these types of add ons in a house.  They are great sales points that can really distinguish your home from its competitors in the marketplace.  But don't expect them to raise your value over other homes sold in the area.  Into the high range of the market maybe, but not over the top.  Theoretically we could raise the price of that new listing by an amount that would make the payment rise equal to the amount the utility bills are lower.  Theory is great, but I'm no scientist and it doesn't work that way.

    So, if you want to install remote control window shades that run off of an App on your Iphone, Rock On!  But don't try to add their cost onto the price of your house when you ask me to list it, or you'll end up in the dark. 

    If you have any questions about Real Estate, or there is anything I may do to be of service, please do not hesitate to call me anytime. 

    Have a great week!

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Posted by Peter Fulmer on January 24th, 2011 11:32 AMPost a Comment

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