5 Important Things Your Neighbor’s Home Can Tell You Before You Sell or Renovate

Thinking of selling or renovating your home? Well, before you do, you should probably spend a little time scoping out other homes on your street. Short of being a nosy neighbor, it would be in your best interests to find out all there is to know about other homes in the area.

Why? Because there is so much these homes can tell you about what you should (and shouldn’t) do when it comes time to sell or renovate your home.

How Much You Can Potentially Sell For

One of the most important components to selling your home – whether it’s today or at some point in the future – is picking the right listing price according to your local real estate market conditions. It’s never a good idea to just slap up a random price and see if it attracts any takers. While home sellers obviously want to get the most dollar for their properties, over-pricing the home can be a sure-fire way to scare off the masses and leave your home lingering on the market forever.

The best way to determine what your home is really worth is by finding out what all the other comparable homes on your street are worth. The true value of your home isn’t necessarily what you think it’s worth, but what buyers are willing to pay for it. And by finding out what other homes on the block have recently sold for, you’ll know roughly what you can get for it.

Asking Price Vs. Selling Price

What a home is listed for isn’t necessarily what it will be sold for. Listing prices do not actually show what the home is really worth. Your neighbor might list his house for $500,000, for instance, but that doesn’t mean he’s going to get it. It could be that the home is actually worth $475,000. Don’t make the mistake of assuming that the asking prices of homes on your street dictate what the homes are actually worth.

What you should be looking at instead is what homes sold for in recent weeks. That will give you a much clearer indication of how to potentially price your home should you decide to sell. It also dictates a cap on how much you spend on any upgrades or renovations – if you spend too much, you might not necessarily recoup that money should you sell in the future.

What Buyers Actually Want

If you’re planning on putting in a pool or adding a second story to your bungalow, check around the neighborhood first to see if the improvements you plan on making are in line with what your area commands.

What sorts of features and amenities are in homes in the area that are being snatched up for big bucks? Try to identify a pattern of specific features, which in turn will help give you a clearer idea about what buyers want. If you renovate your home to make it much different that all the other properties in the neighborhood, you might have a much tougher time selling in the future.

Activity of the Current Market

Finding out the percentage difference in price between the list and final selling prices can tell you a lot about the current real estate market’s activity.

For instance, have homes in the area typically been selling for 95 percent of asking price? Are there usually multiple offer situations with homes in the neighborhood? Have homes been selling within days of being put up on the market? The answers to these questions can give you a clear indication about where the market is heading, and how you should price your home when it comes time to sell.

What Your Competition is Like

If you want to see who you’re up against when you put your home up for sale, get a closer look at the homes in your neighborhood that are currently listed. Ask around and go to open houses. Have a look at the listings on MLS, or have your real estate agent pull a report for you about current and recently sold listings. Seeing what’s on the market today can give you the chance to find out what your home might be lacking compared to others, or how your home may even be superior.

You can learn a lot from your neighbor’s home. While many things may be none of your business, other pieces of information can come in really handy to help you position your home in the best light if you decide to sell in the near future. It can also help you decide if a certain type of renovation will keep your home in line with what buyers in the area are looking for, or if you’re just wasting your time and money. As always, speaking with an experienced realtor with in-depth knowledge of the market in your area can help you make the right decisions.