7 Promising Signs the Home You’re Buying Will Have Good Resale Value

home buying good resale value

By Jamie Wiebe

While it might seem premature to think about selling a home before you even buy it, it’s important to remember that a house is an investment. And in an ideal world, investments make money—not lose it.

That’s why resale value should be an important consideration when house hunting. No, it shouldn’t supersede your must-have requirements (if you demand 20 acres and lakefront access, prioritize that). But if you do your best to predict how the house you’re buying—and the neighborhood it’s in—will appeal to future buyers, then future-you will be a whole lot happier. And possibly richer.

Considering resale value “also saves the buyers a lot of money, as they will not need to spend big on renovations or updates,” says real estate agent Lukasz Kukwa.

But one caveat: Good resale value is never a promise.

“It is almost impossible to guarantee that a home will retain its full resale value, as the local market and economic factors have a large effect on the housing market,” Kukwa says.

In short: Resale value is anybody’s guess if the economy tanks. But there are some indicators to watch for that could be the difference between barely squeaking by or coming out ahead. As you hit the house-hunting trail, look for these promising signs that suggest your investment will be a smart one.

1. The neighborhood’s hopping…

Pay attention to your surroundings when house hunting. Is the neighborhood walkable? Or is a trip to the grocery store so onerous it requires snacks for the road? Meanwhile, are there restaurants nearby for those nights you simply just can’t?

“If you buy in an area that is not well-developed and doesn’t have good infrastructure—like shopping close by—you will not have a high rate of return on the home,” says Realtor® Patricia Vosburgh.

“The more amenities, the higher chances the home will sell faster and for more money,” she explains.

Even if there are development plans in the works, don’t bank on that to prop up property values; construction can stall or be scrapped entirely. When calculating your home’s future worth, focus on what exists now.

2. … but the street itself is quiet

Buying a home is a study in contrasts: You want a gorgeous kitchen—and good delivery options, too. You need five bedrooms—and a decent hotel around the corner because no way is your mother-in-law staying with you. You want things to be hopping—but not in your backyard.

“We advise against buying on a busy street or purchasing a home surrounded by commercial properties nearby,” Vosburgh says.

Not that there aren’t buyers—possibly even you—who love living in the middle of the action. But before you buy the bungalow next to your favorite watering hole, consider that future buyers might not be so keen.

3. The home’s systems are in good shape

Many people consider return on investment to be the sum of a simple calculation: Will the home sell for more than you paid?

But it’s a little more complex than that. You have to factor in how much you’ll spend on the home while living there—even if the market becomes red-hot. And if the home’s vital components are falling apart, you’ll be spending a lot.

Your inspector can give you a rundown of your future home’s health, but keep a close eye on the roof, water heater, HVAC system, windows, and foundation. Pay attention to the plumbing and electrical, too. A problem with any one of these major systems can require a costly repair—and take a bite out of your payday.

“When these items are new or in good standing, that’s a great sign,” Kukwa says.

4. The schools are great

If you’re child-free, this one might seem entirely irrelevant. But a word to the wise: If you think you might someday sell your home, you’ll want to factor in the school district before you buy.

“Even if buyers personally don’t have children, for resale it is imperative that they buy in a great school zone,” Vosburgh says. (You can check school ratings at GreatSchools.org.)

Just make sure to do your research and determine where the home sits in relation to the school district boundaries.

“Often agents will advertise a property as being near such-and-such school area, but not necessarily specify the district, which can be very confusing,” explains Tina Maraj, a Realtor with Re/Max North Orange County in Fullerton, CA. “It can be a real eye-opener if a buyer closes and they’re on one side of a main street that is the dividing line between the top-rated and the lowest-rated high schools.”

5. The light is inspiring

“Any apartment in any neighborhood that has good light will sell—and will always sell,” says New York City broker Noemi Bitterman.

With good light, “there is always a good feeling—a feeling of embracing and belonging,” she continues. “When [a home] is dark, no matter how nice and new it is, it doesn’t feel inviting, it takes a much longer time to sell, and the price reflects the lack of light.”

Whether you’re shopping for a condo, apartment, or house, visit the property at different times of the day to see how the light affects the space.

6. The floor plan is family-friendly

Again? asks the child-free reader. Must all my housing decisions be dictated by families? No. But if you’re hoping to sell that home for a profit down the road, you should keep kid-friendliness in mind.

“Look for a home with a floor plan that will appeal to families,” says broker Kris Lindahl. That means at least three—if not four—bedrooms on the same level, an open concept kitchen, and at least one bathtub.

And always pay attention to the number of bathrooms. You want “enough to avoid fights in the morning,” Lindahl says.

On a related note: No matter how much you love that gloriously unique Frank Lloyd Wright spiral house, it’s often best to stick to a more traditional floor plan if you’re worried about selling later.

“Buying a home that is too quirky or has very untraditional features can result in a decreased ROI and smaller pool of potential buyers in the future,” Kukwa says.

7. The community is restrictive

Homeowners associations can be a pain in the butt—the irritating restrictions, the monotonous meetings, the monthly dues that you’re not always sure you can account for.

But an HOA can actually be helpful, at least when it comes to resale value. That’s because HOAs usually keep everyone in line, preventing your neighbors from letting weeds take over their lawn, painting their houses bright pink, or permanently parking an RV in the middle of your street—all things that could ding the value of your home.

Of course, purchasing an HOA-regulated home isn’t for everyone. But if you’re seriously concerned about the resale value of your new home, covenants and restrictions could keep you flush.

Wendy Helfenbaum contributed to this story.


Cheat Sheet: Check These 9 Things to Prevent Home Buyer’s Remorse

prevent buyers remorse

By: Jamie Wiebe

Any home buyer understands the generic “before you buy” to-do list: Check out the schools. Knock on your future neighbors’ doors. Get an inspection. Stop by at night.

But in order to truly do your due diligence, you have to get even more proactive—and sometimes just a bit nosy. We know your pile of home-buying homework is huge, and you don’t want to add more to your to-do list. But the payoff of all this extra sniffing around can be truly substantial.Trust us on this one, OK?

Here are nine things that home buyers often forget to check that can cause massive headaches—and costly expenses—down the line.

1. Property lines

Skipping the property survey might seem like an easy decision. Surveys can be pricey and seemingly unnecessary—hey, the fence has stood for years, so it must be in the correct place. Right? But the thing about property line disputes is that they can crop up at the most inconvenient times—and you don’t want to be caught off guard when they do.

Maybe you loved the winding, tree-lined driveway. “But until you had a survey done, you had no idea the driveway crossed over the neighbor’s lawn,” says Lindy Gelb, a Realtor® with Berkshire Hathaway PenFed Realty in Bethesda, MD.

That means any improvements you want to make might be impossible, or you might end up in a drawn-out legal dispute with your neighbors. Pay for a survey beforehand to ensure none of your dream improvements will start a turf war.

2. Prior claims history

Previous owners might have ruined your chances of buying your dream home—and they might not even know it. A long history of insurance claims can render a home uninsurable, making it a risky purchase. (Or even an impossible one, depending on your lender.)

Even if previous claims aren’t severe enough to scare off the insurance agencies, your home’s history might indicate whether there will be repeated problems in the future, such as roof leaks, faulty plumbing, or flooding.

3. Pests

We’re not talking about annoying neighbors. And we’re not talking just about termites, either. Skipping the pest inspection when purchasing a home can come back to bite you in the bum. Literally.

“Even if the previous owners didn’t leave behind old furniture or mattresses, bedbugs can still survive in carpets or curtains,” says Alex Yakimavets, the owner of MattressVille in Ontario, Canada.

If you’re particularly concerned, you can make your offer conditional on an inspection, he adds. That way, you’re free to back out if any bloodsuckers pop up in the carpeting—or if you spot termites or carpenter ants chowing through your wood.

4. Detailed HOA information

If you’re a first-time home buyer, you might be terrified by the seemingly evil HOA. But a homeowners association isn’t necessarily all that scary—as long as you check it out first.

“Avoid known unknowns and do your homework,” says Robert Tankel, a lawyer who works with homeowners and condo associations in Dunedin, FL. “It will pay off by giving you comfort that there’s no huge due increase on the horizon.”

So how do you dig into your impenetrable HOA? Just ask! Try to acquire budgets, financial reports, and meeting minutes to get a full picture of your future association, Tankel recommends. Make sure your neighbors are paying their dues or that the HOA has enough funds for necessary upkeep and repairs. Otherwise, you might end up on the hook for a costly wake-up call after move-in.

5. Ghosts (and famous people)

Maybe it’s been years since the last time you Facebook-stalked an old high school fling—but it’s time to bring those skills back into use. Googling your potential address might seem obvious, but a deep dive into the results can turn up shocking surprises.

Like ghosts. Or celebrities. Or celebrity ghosts (even better)!

“See if the home has any history or fame behind it,” says Bianca Mitchell, a Realtor in Los Angeles. “Is it rumored to be haunted? Or did someone famous live there prior to you? This could save you the headache of tourists and fans visiting your home on a regular basis.”

6. Flood zones

Flood insurance can add thousands of dollars to your insurance bills, and flood plains aren’t always obvious to the untrained eye. Sure, there’s no creek in the backyard—but that doesn’t mean you’ll be dry when the rains come.

And if you’re on a tight budget, keep a close eye on the flood map. Typically, homeowners can’t elect to skip flood insurance if they’re in a hazard zone. Your insurance company (and possibly even your lender) might require it.

7. Master plan

If you’re buying in an older neighborhood stuffed with 50-year-old homes, what you see is probably what you’ll get. No new commercial areas planned, no new bus stops to expect. But for newer hoods, understanding the area’s master plan—the overview of nearby land use and future development—is key to determining if your home is a good deal or a terrible mistake. (Your city might also call this a “comprehensive plan.”)

“What if a new metro rail is planned to run across your front yard?” Gelb asks. “Before you ratify your contract to purchase, take time to know what is planned surrounding your neighborhood and your new home.”

8. Square footage

Take the home’s listed square footage with a grain of salt. It’s not that sellers are liars, but they might be basing the number from an off-base city assessment or a simple mathematical mistake.

“If your local MLS says a home is 2,000 square feet and it feels smaller to you, it might be in your best interest to get a second opinion,” Mitchell says.

That’s because inaccurate measurements aren’t just annoying. Square footage errors may also cause issues with your appraisal. Even if it’s off by only about 150 square feet, in a small space that could mean a big difference in price.

9. Crime

Don’t let pretty porches and well-kept lawns fool you: Checking out crime in the area is a must-do—and you should always dig deep.

For detailed criminal statistics, CrimeReports.com and SpotCrime provide extensive information on burglaries, auto thefts, and violent assaults that have occurred nearby. Check the National Sex Offender Database (or Family Watchdog) to see who’s living nearby.

One thing to keep in mind: Even the safest neighborhoods may have the occasional theft or aggravated assault. Make sure to consider results in aggregate.