Direct: 250-477-9947 | Email: Valerie@ValerieEdwards.com
Hi, I'm Valerie and I want to help answer any questions you have. Please don't hesitate to send me a question, I would love to hear from you!
Is it possible to over-renovate a property?
The short answer is YES! This is a common mistake sellers make. If you are renovating for your own use and pleasure, it doesn't matter too much what you spend. But, if you want to be able to recoup most of your renovation costs when you sell, be cognizant of your overall market value. I once saw a lower-end townhouse in which the seller had put in a really high-end kitchen. Unless he did the work himself and saved a huge amount of money, he would never have been able to recoup his money if he sold. Buyers may love all the wonderful renovations but if the renovations are not in keeping with the general maket value of the neighborhood, buyers won't be willing to pay for it all. I recently showed a townhouse that was modest in it's original 70's structure. The sellers, however, had renovated throughout with very high-end materials, spending a small fortune. They priced their property thinking they would be able to recoup all the renovation costs. When it came time for offers, they were quite surprised that no one was ready to pay their asking price. In conclusion, before you pick up the hammer, always step back and consider the overall market value of your type of property and renovate accordingly.
The deposit is a negotiable term which means that both the buyer and seller must agree on the amount. The amount of a deposit depends on the purchase price, your cash available, and circumstances to do with the offer. In Victoria, based on a $300,000 price point, an acceptable deposit would be between $2000 - $5000. If you are in a competing offer situation, a larger deposit might sway the sellers to accept your offer over other offers if all other terms of the contracts are equal in value. For more info on deposits, see my blog entitled Don't Underestimate the Importance of the Deposit, under Ruminations of a Realtor on my home page.
Ask your REALTOR® to do a Market Evaluation of this property which will give you an idea of its fair market value. Using this as a bench mark, take into consideration how long it has been on the market, what do you know about the seller’s motivation (if anything), whether the property is vacant, market conditions (do properties stay on the market a long time or is it going be snatched up quickly) and finally, determine what you are willing to pay for it based on your own needs, desires, and financial abilities.
There are several things you can do make this transition successful. Before you list your property, go to open houses, look on the internet, and even ask your REALTOR® to show you a few properties of interest (they may still be on the market when you’re ready to buy). Oftentimes, that alone will bring comfort and hope that there already is or will likely be a property you will be happy living in. After you list your property, start hunting for your next one in earnest. Then when you get an offer you’ll be ready to pounce. If you own your current home out-right, you could possibly qualify for interim financing, in which case, you could get an accepted offer on your next home with a long possession date, giving you time to sell your own. There are more strategies, but these are a few of the basics that will help you make a move with confidence.