I hope you had a wonderful Halloween a couple of days ago. In honor of the “holiday,” I put together a video tour of the Winchester Mystery House, which I recently visited (for the first time!) with my family. I’m a history buff, so I really enjoyed our visit. And if you’re worried that it’s spooky: it’s not. Funky is more the word for it.
What it is for me as a REALTOR is an object lesson in money poorly invested on home improvement. Sarah Winchester who built it is said to have spent $5.5 million working on the home over 36 years…but after she died in 1922, her home was auctioned off for a mere $135K.
I can just imagine Sarah trying to unload the home before her passing … listing it for $5.5 million (because that’s what is was worth…to her)…then $5 million, then $4 million, and then on and on and down and down until finally finding someone willing to take it off her hands in the (very) low fix figures. Ouch.
And that’s the problem with custom homes, or custom upgrades to an existing home. Often times, the improvements that are made are expensive but not marketable. It will be difficult or impossible to find a buyer who sees the same value in those bespoke improvements as you do.
I’m a fan of those Reality TV shows about real estate – I don’t necessarily go out of my way to watch them, but I do get to watch a lot of video as I grind away on my 1-hour daily Peloton sessions.
One of my favorite shows is Million Dollar Listing New York, because (imagine me singing here) I Love New York. And they do show some pretty bangin’ real estate on MDLNY.
In one episode, REALTOR® extraordinaire Fredrik Eklund explained to a seller that he wouldn’t get as much money out of the property as he put into it. And he had a really good metaphor to help his client understand why.
Fredrik explained it like this: the very nice tailored suit he was wearing cost $2,000. Would the seller buy the suit from Fredrik for $2,000?
No, of course not. Because the suit wouldn’t fit him. It may not be to his taste. But even if it was his style and size, he probably still wouldn’t pay $2,000 for a second-hand suit. The buyer would see much less value in the suit than Fredrik did, and would almost certainly pay quite a bit less for it (if he would even buy it at all).
I’m not suggesting that Sarah Winchester mis-spent that $5.5 million on her house…you can’t take it with you, after all. But if you’re not an heir/ess to an enormous fortune and you need to be a little more careful with your money, my advice is to spend it on real estate and related improvements that has broad appeal. Improve your home in a way that everyone likes, not just you.
Truth be told, whenever I see a listing that claims to be “one of a kind” I am immediately wary. Unless it’s a spectacular one-of-a-kind location, it’s something that could be copied. And it would be copied, if there were a market for it, right? So the fact that it’s a one-of-a-kind house (like the Winchester Mystery House) means that there are probably very few buyers for it.
Hey, now that we’re officially deep into the fall season – are you up for having a pumpkin spice latte with me? I’m buying! Let me know if you’d like to get together and talk turkey about real estate, or anything else that’s gnawing at you. 🙂