Translate

Follow by Email

Thursday, August 28, 2014

Do a Franklin chart on your home before you list it. (PART 1 OF 2 PARTS)

Whenever I get a call from someone who is thinking of listing their home, I ask to visit the home and then come back and do what I call “the pluses and minuses” review – listing the things that I saw that will likely add to (a +) or detract from (a -) the market value of the home. Many times I will put the list that I have compiled from my visit in the form of a Franklin chart, named for
Benjamin Franklin who is credited with inventing it.

A Franklin chart is one of the simplest forms of chart or data display and is very easy for most people to interpret. Things on the chart are either good or bad, either a plus or a minus, either an adder or a detractor from value. There may be disagreements about the weight or size of the plus or minus and maybe even about the categories or whether something that is “good enough for me” belongs on the plus or minus side (more on that later). The point of the chart is to show the homeowner some of the things that will determine what he/she might get for the place. It can also provide a good starting point for a “to do” list of fix-ups that are needed.

So, what are some of the things that I look for and how do I judge whether they are pluses or minuses? Let’s start outside:

Location is still a primary factor for any property, although in the current market the real estate mantra has shifted from “location, location, location” to one of “location, price, price.” A home located on a busy, main road would get a big minus. A busy side street might still get a minus, but not as big of one. A quiet side street or cul de sac location might get a plus. I say might, because it still matters where that street or cul de sac is located. Another location factor might be a waterfront location, with a big plus for lakefront, a lesser sized pluses for being on a canal and maybe a tiny plus for being in a sub with some form of lake access. Being involved with water almost always gets the property a plus of some size. Other locations that would likely draw pluses are being located on a golf course, backing up to a state park or state land, being within walking distance to a downtown area, or maybe even just being located within the boundaries of a particularly good school district.

In real estate, as in some other things in life, size matters. That criteria covers both the house and the property. Having some land is a big plus for most buyers. Having lots of living space is also great, but within the constraints of affordability. Having a big piece of land isn’t worth a big plus if most of the land is swamp or wetlands (which is common in this area), so that could end up as a minus. Ravened or rolling properties and properties with water features like a pond or stream running through are pluses, as opposed to the flat, featureless landscapes of old farm fields. Having sufficient land is particularly important to horse people who need pasture space and a place to build outbuildings. It may be important to people with lots of motorized toys, too. In both of those cases, being located next to state land is usually a big plus.

While we are still outside, I look at the landscaping and any outdoor entertaining or living areas. Nice, well-maintained landscaping is a plus; whereas, weedy or overgrown yards are a definite minus. A nice paver or stamped concrete patio or a nice wood or composite deck is a plus, especially if the owner has added things like a pergola and maybe a fire pit. “Outdoor rooms” are all the rage right now and are worth some pluses if done well. An old concrete slab with a rusty old barbeque pit on it will earn a big minus. Even small “city lots” can be turned into an oasis from the everyday world with the right landscaping and can be a plus when it is time to sell. 

Pools are a real mixed bag. A nice, well-maintained in-ground pool can be a big plus; however there is a sizable faction of the potential buyer-pool that will view that pool as a health threat, if they have younger children. The pool equipment must be clean looking, up-to-date and functioning correctly for the pool to get a big plus. It helps if the house has storage and other accommodations (such as a bathroom with shower right inside the door leading to the pool) in support of pool activities. Many well done pool settings will incorporate the outdoor room concept and have the entertaining/dining area integrated. Some may even have a pool house
or cabana. Above ground pools never have the cachet of in-ground pools and many times are really minuses. Most do not look very attractive, no matter how much decking is arrayed around it and many are not as well maintained as in-ground pools. Lots of those decks that were built around above ground pools also do not meet the safety requirements for an FHA loan. I seldom see an above ground pool that I would award a plus for and many times I advise the sellers to take them out. While we’re at it, most of the time hot tubs do not earn a plus. Most have not been maintained well and it shows. A newer hot tub in excellent condition will at best not detract from the value. 

While we’re still outside, things like play structures, swing sets, sand boxes, especially at homes owned by couple’s whose children have grown and left, usually end up being in some state of disrepair and would be minuses. Specially-built features that an owner might have put in to accommodate a hobby, such as an RV parking pad or an old tennis court or even a putting green may also be minuses if they have fallen into disrepair and the new owners believe that they will have to remove them. As for garage spaces; three car garages are expected these days and any less will be a minus (slight minus for a 2-car and major minus for a one car or no garage at all). For real car guys having 4-5 spaces would be a big plus and a huge plus if one of them has a lift built in (that lift might be viewed as a minus by non-car guy buyers).

Outbuildings are another mixed bag. A horse person will give you a big plus for having a barn with stalls already in place and a smaller plus for maybe at least having a pole barn that they can modify. You might also get a plus for a hay barn, if it is in good condition. Car guys will also be happy with a pole barn with room for storing their cars - pluses if they are in good shape and minuses of they need to be torn down or require immediate attention, such as a new roof. Other outbuilding, such as sheds are of little real consequence unless they are in sad shape (minus) or there is no basement or garage for storing (then a plus, if the shed is in good condition).

Finally outside, the existence and condition of trees can be a plus or minus. We have had a hard time in Michigan with several types of invasive diseases and bugs that have decimated a large number of our trees. Having several or many large, nature trees on the property would be a plus, IF they are healthy. Having several trees that will obviously need to be taking down is a minus. If the property is a fairly new build there is a very good chance that it has little in the way of trees. Builders some time back decided that the quickest and least expensive way for them to build was to knock everything down and start with bare land. Builders very seldom even attempted to save mature trees. The results are huge new subs with not a single mature tree in sight. Each “lot package” came with a few new, small trees stuck in place after everything else was done. There may have been a few “premium lots” with a few mature trees on them offered, but very few. So, most new-build subs, no matter how “upscale“ they are get few pluses for trees.


In my next installment I will move inside and continue the hunt for pluses and minuses. 

No comments: