A lot of thought and careful planning go into buying a house. This is especially true when searching for a long-term home within a community where you’ll spend many years and possibly even raise a family.
Unless you’re buying strictly for investment purposes, many of your priorities will be lifestyle-based. The square footage, layout, location, structure and overall vibe should be just right.
If all goes well, you’ll end up with a place where you feel right at home in addition to making an intelligent financial investment. This brings us to the concept of resale value, one of the most important yet overlooked metrics when buying real estate.
In this post, we’ll talk about why resale value matters so much and what it means for your home search.
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What Is Resale Value?
The definition is simple. If you buy a house today, the “resale value” is approximately how much you could sell it for later. Maybe it seems strange, thinking about selling a property you don’t even own yet.
Future value may not be on your mind at all, presuming you are buying your forever home and have zero plans to move. Life can be unpredictable, however.
You never know what will happen a few years from now. Your housing needs could change.
- You may need more space if there’s a new addition to your family.
- An unexpected career opportunity could require a relocation.
- Eventually, you might decide to downsize to something smaller and easier to maintain.
Wherever life takes you, the value of your home will come into play at some point. If it turns out that you need to sell, you’ll want to maximize your transaction in every way possible. The more you earn, the more purchasing power you will have for your next step.
Do you have more questions about how or when to buy a house? You’ll find specifics in the posts below:
- What Inclusions and Exclusions Should Be on an APS?
- Should I Buy or Sell First?
- Conditions & Clauses on a Real Estate Purchase
If You Never Move, Resale Value Still Matters
Imagine you really have found the perfect home you never want to leave. Everything goes exactly as you planned, and you don’t end up having to move for any unforeseen reason. Even so, resale value is still important, perhaps more so than you realize.
It’s not just about how much money goes into your bank account on closing day. Think about your equity and its effect on your purchasing power. (Equity is the value of everything you own minus any debts and liabilities you owe.)
Since your home is one of your most valuable assets, the price you could sell for (even if you don’t) can impact your overall quality of life. Greater resale value means more purchasing power for anything you want to do or experience.
The financial implications are beyond the scope of this blog. That said, there are countless options available when you have years’ worth of equity in your home that has increased in value steadily over time. For example:
- If you want to make upgrades to your home and increase its value even more, you could potentially borrow funds from a Home Equity Loan or Home Equity Line of Credit.
- Alternatively, you can liquidate part of your property value to invest those funds elsewhere.
- Homeowners over the age of 55 may have the option of tapping into their equity for cash through reverse mortgages, but this isn’t a decision to take lightly. If you want to explore this route, be sure to talk to a financial advisor about your options and how they might impact you or your beneficiaries later on.
Your home is your asset, and only you can decide when and if it’s time to move on or if you will borrow against its value for any reason. You might never do either.
Perhaps you will hold on and keep the house in the family for the next generation. Whatever path you choose, it is still empowering to know what your home is worth.
What Affects Resale Value in a House?
Some attributes impact resale value more than others. That’s why it’s important to know what to look for when buying a house in the first place. Some issues are also easier to fix than others to make a home more aesthetically pleasing and financially valuable.
- Old, worn-out paint can lead to a lower selling price because so many people just cannot see past it. Luckily, it’s also a relatively simple and inexpensive repair.
- Contrast that with a collapsing roof or water-damaged basement. These are major problems that give most buyers pause, and unfortunately, they are not so easy or cost-effective to rectify.
If you plan to save money by buying a fixer-upper, look for the one with the bad paint, not the one with foundational issues. You can often get exceptional value by looking beyond surface imperfections. The key is to distinguish between the unsightly and the red flag.
The more support you have when buying a home, the better outcome you can expect. The posts below can also help:
- Buying a House in Ontario Is a Team Effort
- What to Look for in a Home Inspection
- A Survival Checklist for First-Time Home Buyers
High Resale Value Leaves Clues
There is a reason structurally sound, move-in-ready homes sell quickly and hold their value so well; it’s because these are the houses everyone wants. Even in slower markets, desirable properties get better exposure, generate more offers and often earn top dollar.
By focusing on resale value from the very beginning of your homeownership journey, you’re not just making a savvy investment. You’re securing a home anyone would be proud to own, including you!
Do you have questions about buying or selling a house in today’s market? Our top agents in Hamilton & Burlington can help you get the results you need. Reach out today with any questions you have, or call 905-332-9223 to connect with our office.
