They call it the HGTV Effect. Shows like Property Brothers, Love It or List It, House Hunters, and Designed to Sell are extremely popular “reality” TV shows which make home improvements seem inexpensive, easy, and relatively quick to do. They also have many buyers expecting every home to have all those high-end bells and whistles, even the homes that are appropriately priced for simply good/average condition.
Armed with the HGTV education, these buyers have come to expect granite countertops, brushed nickel hardware, stainless steel appliances, newer wide-plank hardwood floors, and updated bathrooms with tiled walk-in showers as minimum standards in a home they would even consider purchasing. BUT if they don’t like the color of the tile, it can be a deal breaker.
It was not that long ago that many buyers saw potential in a home with an older kitchen, shag carpeting, and wallpaper throughout. Nowadays, even a 10 year old kitchen is considered by some buyers as “outdated and needs to be redone.” And those buyers often attempt to incorporate the cost of a kitchen remodel into their offer price regardless of whether the home is appropriately priced for its current condition.
Everyone loves a bargain, but HGTV has also emboldened a new age of buyers looking for the $350,000 home on a $275,000 budget. These buyers can be very aggressive with their offers often citing condition as a justification. But because many of these buyers are cash poor and honestly wouldn’t be able to afford the updates after settlement, they want the seller to do them or discount the house.
Homes that have some cosmetic challenges, but are otherwise in very solid condition, are often passed right over by today’s homebuyers. This is despite the fact that the home would be priced significantly higher if it were completely updated.
The fact is, most homes sold today are not nearly as picture perfect as HGTV would lead you to believe. And the only way you can completely gut and remodel a kitchen and two bathrooms on a $20,000 budget in 3 days is with cheap (sometimes free) labor, discounted (sometimes donated by sponsors) materials, and weeks of unseen prep time before the cameras start rolling.
In the real world, this misinformation can lead to some serious frustration for both sellers (who are being told their well-maintained home needs extensive updates) and the buyers (who are expecting those updates or steep discounts on price). To add to the confusion:
1. Websites such as Zillow provide an estimate of a home’s value using minimal data from a property’s tax record and those of nearby “comparable” sales. Zillow assumes average condition, location, etc. When these factors deviate from average (as they inevitably do), Zillow’s estimates tend to become less and less accurate.
2. Many home buyers have not forgotten the housing downturn of 2007-2010 and still fear overpaying for a home.
3. Modern appliances such as refrigerators, dishwashers, and water heaters now have low life expectancies of 7-10 years. Some buyers assume that if things aren’t brand new, they will have to be replaced within a few years.
While “ruining real estate” is an exaggeration, HGTV has definitely spawned a new breed of buyers with a very different mindset from most sellers and even from the buyers of only a decade ago.
If you enjoy reading our blog, please SUBSCRIBE.
The Scott Loper Team
Scott & Lisa Loper