SAN JOSE, Calif. – Nov. 18, 2015 – Homebuyers are wise to take note the nearby houses before they make an offer on that picture-perfect home. Buying the most expensive house in the neighborhood isn't always the best strategy.
"A lot of buyers forget a home is an investment," says Brendon DeSimone, a real estate expert and author of "Next Generation Real Estate." "The world changes. Things happen fast. People transfer, people lose their jobs. Now imagine yourself as the seller of that home."
With the nicest home on the block, homeowners who do any upgrades – even minor – may be doing a larger mismatch between their home and the surrounding homes.
By considering the home an investment, buyers will look at properties that leave some room for improvement as a way to build equity and hopefully even pay it off when they do sell.
DeSimone goes to the other extreme and actually recommends that clients buy the worst house in the best neighborhood.
"You can add value on your own," he says. "If you're choosing between an awesome house in a crappy location or an awful house in a great location, I would choose the latter."
Improvement doesn't need to entail a total renovation either. DeSimone says just regular maintenance, refreshing the paint and making minor repairs that the previous owner ignored, could add to the home's value. On the other hand, if the home is already priced well above the rest of the neighborhood, even minor changes in those pricey homes won't likely make much of a difference to the value.
"Buy a bad house," DeSimone says. "At least you can improve the interiors and make it more valuable. If that neighborhood doesn't actually 'up-and-come,' your expensive home is already as viable as it can be."
Source: "Why You Should Never Buy the Best House in the Neighborhood," realtor.com® (Nov. 5, 2015)
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