Yahoo Finance If Your Home Value Is Dropping, Do These 10 Things Now
Your home is your greatest investment, but it may not pay off. This is alarming, especially if you’re planning to sell in the near future.
“While it’s rare for home values to decrease dramatically, homeowners should take a proactive approach to increase their home’s worth,” said Jason Gelios, a realtor and senior real estate specialist in southeast Michigan.
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Thankfully, there’s plenty of actions you can take to ensure your home still appeals to buyers. So, take a deep breath and follow these 10 steps to keep your property value as high as possible.
Conduct Thoughtful Updates
“Homeowners should look at what similar homes look like in their area to determine where they should spend their dollars on renovations to preserve their home’s value,” Gelios said.
When it comes to upgrades that improve a home’s value, he said the kitchen is the best place to start. “It doesn’t necessarily have to break the bank,” he said. “Homeowners can upgrade their kitchen by replacing or adding hardware, painting cabinets, adding or replacing an island and upgrading appliances.”
He said other improvements, including bathroom updates, upgraded landscaping and other projects to increase curb appeal can also add value to a home.
“My best advice to homeowners in a declining price environment is to focus on what they can control,” said Tim Trainum, a real estate agent and owner of Tim Trainum Properties, based in northern Virginia. “All homeowners are impacted by falling prices, but not all homeowners are impacted [by] falling home condition[s] and maintenance.”
He agreed that focusing on areas like deferred maintenance, updates and curb appeal can pay off. “Paint using trendy, neutral colors,” he said. “Replace old carpeting and refinish worn hardwoods. Update lighting and fixtures with current finishes.”
He recommended making needed repairs and updates, so prospective buyers don’t think the home has been neglected. “Consider replacing major systems that are beyond their useful life, like the HVAC or roof,” he said. “Concentrate on the things you can control.”
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Get a Professional Appraisal
It’s essential to obtain an appraisal from a licensed and experienced appraiser, said Rod Khleif, a real estate investor and host of “The Lifetime Cashflow Through Real Estate Investing” podcast.
“Knowing the precise current value of your property allows you to make informed decisions and assess the impact of market fluctuations accurately,” he said. “This knowledge empowers you to take timely action to protect your home’s equity.”
Create an Alternative Savings Plan
Since the property might not be worth as much as expected, Khleif advised developing a financial cushion to mitigate any potential market risks.
“Establish an alternative savings plan specifically dedicated to your property’s maintenance and upkeep,” he said. “Having sufficient reserves ensures that you can handle unexpected repairs or improvements without compromising the property’s value.”
Regularly Monitor the Local Real Estate Market
Real estate trends can change frequently, so Khleif emphasized the importance of staying informed.
“Regularly review comparable properties’ sales and assess how they may influence your home’s value,” he said. “Understanding the market dynamics empowers you to adjust your strategies accordingly.”
Explore Alternative Revenue Streams
If you’ve put plans to sell your home on hold, Khleif said you may still be able to use the property to generate revenue.
“For instance, if zoning permits, you could offer short-term rentals or explore co-living arrangements to generate additional income,” he said. “These strategies can offset some costs and contribute to your property’s financial stability.”
Build Strong Relationships With Local Professionals
“Develop relationships with trusted local real estate agents, property managers and contractors,” Khleif said. “Having a reliable network ensures that you have access to expert advice and support during challenging times.”
He said these professionals will be able to offer insights on your local market and help you make informed decisions.
Be Mindful of Market Timing
When you choose to put your home on the market can make a huge difference, Khleif said.
“If possible, avoid selling during a severe market downturn when prices are depressed,” he said. “Instead, consider holding onto your property until the market stabilizes or rebounds.”
Consider a Property Tax Appeal
“Property tax assessments can impact your home’s value and your financial burden,” said Ritika Asrani, head broker and the owner of Century21 St Maarten. “If you believe your property has been over-assessed, you have the right to appeal the tax assessment.”
To be successful in having your property taxes reduced, she said you’ll need to provide evidence that the value of your property is lower than the assessed value.
“Successfully appealing your property tax assessment not only saves you money, but also contributes to preserving your home’s overall value,” she said.
Leverage Home Improvement Incentives
“Many local governments and utility companies offer incentives and rebates for energy-efficient home improvements,” Asrani said. “Lesser-known programs may include grants or low-interest loans for upgrades like solar panels, energy-efficient appliances or water-saving fixtures.”
She said these improvements will improve your property value while providing long-term savings on utility bills.
“Taking advantage of these programs can increase your home’s appeal to eco-conscious buyers and potentially counteract a declining market,” she said.
Address Design Flaws
It’s possible you have a great space that doesn’t exactly flow. If so, Jim Olenbush, founder of AustinRealEstate.com, recommended tackling these issues.
“In my years in real estate, I’ve noticed that buyers are increasingly discerning, focusing not just on size, but how a space is utilized,” he said. “A redesign that makes a home feel more spacious or functional can pay dividends.”
Final Take
Hopefully, the downturn impacting your home is temporary. If it isn’t, the advice above should help you remain competitive in your local area, so when the time comes, you can sell the property for as much as possible.
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