Superadequacies: Why Your Palace May Be A Home Buyer's House of Horrors

Door to Nowhere, Winchester Mystery House

By Bruce Ueno

In the suburbs of San Jose stands what is perhaps America's best known monument to home remodeling run amok.  The Winchester House is an immense and forbidding Victorian mansion whose labyrinthine interior contains some 160 rooms, 47 fireplaces and architectural oddities like stairs that lead to nowhere and doors that open to solid walls or sheer drops. The home is a testament to the quirky design predilections of gun heiress Sara Winchester, and the very embodiment of the term "superadequacy".

From the Latin for "above, over or beyond", at first blush a "superadequacy" sounds like it could be a good thing. After all, who wouldn't want a home that is far more than adequate.  Home appraisers and real estate professionals however, have a much different definition for the term.  In real estate parlance, superadequacies can be defined as improvements to a property that exceed market requirements and  that add little or nothing to the property's value. To the contrary, many of these over- improvements can actually decrease a home's equity and its desirability to future buyers.

As a Realtor, I typically see several mini-Winchester houses during the course of a year, those ambitious but ill-conceived renovation projects that cause potential buyers to scratch their heads and ask "what on earth were they thinking?" Here are a few tip-offs that your home may make the list:

Home Is a Hodgepodge
Home design is a complex art, and residential architects are well-versed in achieving the ideal balance of form and function.  In a properly designed home, every room, every window, and every door has a place and a reason to be there.  Do-it-yourself renovations often ignore the home's original design objectives with disastrous results. I recently viewed a 1300 square foot house with a rambling 1300 square foot addition that included such lovely amenities as an 8' outdoor Jacuzzi in the bonus room, a windowless, dungeon-like game room hidden behind an obviously fake false bookcase, and a trophy wall adorned with the owner's prized collection of of empty beer cans (included in the sale, and valued at $4,000).  A series of agents had attempted to sell this home over the years, all of them without success.

Options are Gone
Presumably, owners renovate in order to get some added benefit from the home, but to get a sense of the impact the improvement will have upon a home's attractiveness to a future buyer, it's also necessary to think in terms of the attributes that are sacrificed in order to receive the benefit. For example, a room addition will add interior space, but if it takes up a large portion of the back yard  potential buyers may come to see the negatives as outweighing the positives.  They'll see that there's no room for a mom's vegetable garden, no play area for the kids and room for an outdoor entertainment area; all bad news for a seller.

Property Boundaries and Easements are Ignored
This is a topic in and of itself, but I've included a mention here because encroachments and superadequacies often go hand in hand.  One hapless property owner I know built a large room addition that opened onto a local power company's easement, with the mistaken notion that the company would never actually exercise it's right to the use of the property.  When the utility announced plans to run new lines through the easement, the homeowner fought the company and lost. The back door of his home now faces a high wall just inches away, rendering a sale virtually impossible.

It's the Biggest House on the Block
When it comes to houses, you really can have too much of a good thing.  The old saw holds true here- from a resale standpoint it's best to be have the smallest home in a neighborhood of larger homes than the largest home in neighborhood of smaller ones. Appraisers and real estate professionals know this as the principle of regression. If your home is a 3000 square-foot behemoth in an area where others houses average 1600 square feet, the value of your home will be drawn down by the value of the smaller homes in the area. Potential buyers who want a 3000 square-foot house will look for it in a neighborhood of similar properties, not in yours.

It's Out of Character for the Area
Even if you home's square footage is in line with the neighborhood, other improvements that are not in keeping with local norms can impair the value of your home.  The addition of an ornate stone facade to a home in a tract of plain-Jane, cookie-cutter houses, for example, is not likely to make the property appraise for any more than other homes in the area, and may actually cause the value of the adjacent properties to decline.

It's Quirky
When we want to describe something as being unimaginative or ordinary, we often refer to it as being "plain vanilla", like that same 'ol drippy ice cream cone you may have enjoyed as a kid.  The fact is that vanilla has been the top selling ice cream flavor for years, and it's likely to stay that way for some time to come.  People like vanilla, and vanilla has the special quality of being compatible with just about everything.  What is true for ice cream also holds true for houses. No matter how much you may have spent customizing your castle, the sad fact of the matter is that buyers want to project their own vision onto the blank canvas of their future home.  Your home should be a special place with its own charm and character, but houses that suffer from too much character are a tough sell even in the best of neighborhoods. The late Dick Clark's Malibu abode, infamously fashioned in the style of cartoon caveman Fred Flinstone, has been on and off the market for over a year and has failed to find a buyer despite it's spectacular location and a half-million dollar price reduction- the more "special" your home is, the fewer potential buyers it's likely to find.

If your home suffers from one or more of the symptoms of superadequacy, all hope is not lost.  Your home can still attract the right buyer if you are prepared to make a few changes and compromises on the way to a sale.  An effective real estate agent can guide you through the process of minimizing the problem areas and positioning your home for maximum return on your investment.

Need guidance in the sale of your home?  Contact me today for a no-obligation consultation! (951) 310-0397

For a Quick Home Sale, Make Your Kitchen a Showplace

By Bruce Ueno

Is there anything worse than watching your home languish on the market, especially if you must relocate quickly? If you are buying a home soon, the longer your existing home sits on the market, the greater the change that you will face the nightmare of paying two mortgages simultaneously.

 

Avoid this frightening situation by doing everything you can to sell your home quickly. One of the best ways to entice buyers is to have a dream kitchen. You don't have to remodel your kitchen to woo buyers. Instead, you can use kitchen staging to maximize your kitchen's dreaminess without breaking the bank. Here's how.

 

Walk in the buyers' shoes
Buyers walk through homes trying to imagine how they would fit in. If you stage your kitchen to make it a place that buyers can visualize themselves cooking, then you've succeeded. Therefore, remove personal items, especially refrigerator magnets and art. Your knickknacks and pictures can jolt buyers out of their fantasy. Start packing now. Each box you pack early is one more moving chore that you have completed.

 

Clean, clean, clean
Even if buyers aren't neat freaks themselves, they like to imagine that in a new home, organization and cleanliness will reign supreme. Clean the inside and outside of every appliance even if it doesn't convey. Clean baseboards, dark corners, and inside drawers and cabinets. Get on your hands and knees to clean the floor. You'll be surprised by what your mop has missed over the years. When staging a kitchen, make it model-home clean.

Eliminate unwelcome odors
Of all the senses, the sense of smell is the most closely linked to memory.  Aromas can make or break a deal depending upon the images they evoke. One professional staging expert I know routinely warms a pan of ground cinnamon in the oven for a few minutes to simulate the aroma of freshly baked cookies!  Because we quickly become desensitized to the odors within our own homes, it's a good idea to give your kitchen a "sniff test" from time to time.  Walk in after having been outdoors for a while, close your eyes and take a whiff.  Your kitchen should smell pleasant without greasy or foul smells. Air fresheners are okay, but they should not be overpowering, suggesting that you have something to hide.  Keep the trash cans clean and empty. If the house will be vacant for a time, have someone run the water to keep the U-shaped trap beneath the sink full.  The barrier of standing water is there to keep sewage gasses from entering your home and turning off potential buyers.

 

Create counter space. 
It's time to do some more packing. Entirely clean out one or two cabinets. This is your new space for small appliances. When you put clutter away, you send the message that your kitchen has loads of work space.

 

Improve the eating area
In the eating area, less is definitely more. Take any leaves out of your kitchen table, and store any extra chairs. If your table is large and doesn't have leaves, then consider storing it and replacing it with a smaller version. A little paint can revitalize an inexpensive thrift store find and turn a small table into a fantastic home staging tool.

 

Lighten up
Light makes space appear larger. Under-cabinet lights are inexpensive and easy to install. Install enough lights to eliminate dark corners. Next, upgrade the bulbs in your existing lighting. This simple adjustment really makes a difference.

 

Remove extras
If you have a baker's rack that holds your cookbooks or a decorative cart that doubles as a place to store vases and baskets, you need to start packing. Store both the extra furniture and the items in it. When your kitchen has extra furniture, not only does it look small and cluttered, but the extra furniture also sends the message that your kitchen doesn't have enough storage.

 

Hide pet supplies
Bowls for pets look sloppy. Remember, buyers are imagining a pristine cooking space. In addition, every reminder that you have pets invites worries about dander, odor, and fleas.

 

Give your cabinets some love
A great way to spruce up your kitchen is to replace your pulls and hinges. If your cabinets are painted, then wash them until they shine. If they are made of wood, then clean them using an appropriate wood cleaner. Afterward, improve their richness by rubbing them with furniture polish or oil. Some companies, such as Old English, offer tinted oils that really improve the color.

 

Add warmth
That's right. You went to a lot of trouble to remove personal items. However, now it's kitchen staging time. Look at decorating magazines or catalogs from establishments, such as Crate and Barrel or Pottery Barn. Here, you may find a picture of a kitchen with a lone bowl of fruit on the counter top. You may find that the table has a bouquet of fresh flowers. Sometimes a table is set with colorful place mats and candles. Copy this minimalist, but approachable, décor.

The kitchen is arguably the most valuable room in your home. When you take the time to stage it properly, buyers will begin imagining themselves living here. They will visualize themselves creating delicious meals and sharing warm family moments. Before you know it, they will be selling themselves on your entire home. Perhaps a contract will be coming soon.

Having a Real Estate Agent who's been through the paces will help ensure a successful sale.  Selling a home in the Inland Empire?  Contact me at (951) 310-0397.

How-To Guide: Buying a House for Beginners

by Bruce Ueno

It’s easy to dream about home ownership, but it’s much more complicated to actually buy that dream home. Once you’ve determined that becoming a homeowner is right for you – meaning you plan to stay put for at least five to seven years, have the cash for a down payment and are willing to tackle home projects that would otherwise be farmed out to a landlord – take the purchasing process step by step. Staying organized, open-minded and proactive can simplify the home-buying venture.

Step 1: What Can You Afford?

Crunch the numbers to determine what you can afford – and be realistic about it. Just because the bank approves you for a loan of a certain number doesn’t mean it’s optimal for your budget. A general rule, according to CNN Money, is to purchase a home that costs no more than 2.5 times your annual gross salary. Your total debt, including your mortgage, should not exceed 36 percent of your income. Be frugal when buying a house, recommends financial website Smart Money, and avoid overextending yourself. Consider how you would pay your mortgage in the case of a layoff or disability.

Step 2: Organize Your Finances

Before seeking preapproval, shore up your credit. Pay down debts and attempt to remove any blemishes on your credit report. Strong credit will make the home-buying process easier. Although you can casually search for homes, the eventual process of putting in an offer and applying for a mortgage goes more smoothly when your finances are in order and you’ve gotten preapproval. Check your credit report to ensure it contains correct information and then seek preapproval from a bank or credit union. Obtaining preapproval shows a seller that you’re ready to buy the house.

Step 3: Start Searching

Search for homes with the help of a professional real estate agent. Potential homeowners can find more listings than ever on the Internet, but using an exclusive buyer agent can help you make more informed decisions, particularly when it comes to putting in an offer. When searching for a house, look for one in an area with a good school district; even if you don’t have children, it plays a large role in a home retaining or gaining value, according to CNN Money.

Step 4: Determine Your Down Payment

Determine the source and amount of your down payment. Ideally, lenders would like a down payment of 20 percent. However, a number of specialty loans, including ones from the Federal Housing Administration and the Department of Veteran Affairs, offer opportunities to put down as little as 3 percent. Loans with a down payment less than 20 percent typically require the homeowner to pay private mortgage insurance, which protects the bank in case you don’t make your monthly payments. PMI equals approximately 0.5 percent of the total loan amount per year, according to Kiplinger.

Step 5: Put in an Offer

This is where an experienced real estate agent really helps. An offer on a house should be educated, based on the sales of similar homes in the same neighborhood. Go in with a slightly lower offer – such as 8 to 10 percent below asking price – as a catalyst for negotiation. If the seller accepts, he will sign the contract. In some cases, the buyer includes contingencies in the contract, which are conditions that must be fulfilled before the deal can be completed. This could include a contingency that the buyer's previous home sells before the deal can go through, or that the buyer obtains financing.

Step 6: Earnest Money

Make an earnest money deposit into an escrow account to show the seller that you're serious about purchasing the property. Small or token deposits of under 1% tend to send mixed signals to the seller, so deposit more if you're able. Your agent or lawyer will then review the contract, which is contingent upon your mortgage approval, an approved home inspection and a final walk-through 24 hours before closing.

Step 7: Figure Out Your Mortgage

Choose your mortgage with a loan officer. There are a number of variables when obtaining a mortgage – 15 year versus 30 year, fixed versus adjustable rate, paying points versus lowering your interest rate – The choices can be quite intimidating, but an experienced loan officer will walk you through each option and help you determine the best for your needs.

Step 8: Have an Home Inspection

Hire an experienced home inspector to go through the house with a fine-tooth comb. This professional, often an engineer with experience in home surveys, will ensure there’s nothing major wrong with the house before you purchase it. This can save you unexpected costly repairs that the seller might not be up front about.

Step 9: Finalize the Deal

Walk through the house one last time.  Once your loan documents have been prepared and the terms of the contract have been fulfilled, escrow will prepare a HUD-1 settlement statement which itemizes all monies coming in and being paid out on your closing date.  You and the seller will have a chance to review the documents before the meeting where you will sign the paperwork.  In California, this usually takes place in the escrow office, and it is not necessary for the seller to be present at the meeting. Read each document carefully so you understand, and don’t be afraid to ask questions. You will hand over your cashier’s check for your down payment and any portion of closing costs for which you might be responsible. The property deed will be transferred from seller to buyer, and the home becomes legally yours.

First time buyer in the Inland Empire?  I can help.  Call me at (951) 310-0397