Real estate truths you won't learn from HGTV
I recently watched HGTV's one-hour special Buying & Selling: 20 Best-Kept Secrets. While "price your home right" and "de-personalize" hardly qualify as well-kept secrets, the show does have some solid advice for buyers and sellers. I especially liked Selling Secret #5: Don't Over-Upgrade:
Quick fixes before selling always pay off. Mammoth makeovers, not so much. You probably won't get your money back if you do a huge improvement project before you put your house on the market. Instead, do updates that will pay off and get you top dollar. Get a new fresh coat of paint on the walls. Clean the curtains or go buy some inexpensive new ones. Replace door handles, cabinet hardware, make sure closet doors are on track, fix leaky faucets and clean the grout.
This advice is 100% right on but as I recently complained in my critique of My House is Worth What? It's at odds with the advice you'll get from many other HGTV shows like My House is Worth What?, Designed to Sell, and The Unsellables, which often advocate over-investment in homes that are about to be sold -- the dangers of this over-investment are masked by the fact that HGTV provides a work crew and budget for repairs, something viewers are unlikely to have fall into their laps. Once you back out all the free labor, the return on investment of the fix-ups featured on these shows tends to become highly questionable.
In the spirit of Buying & Selling: 20 Best Kept Secrets, here's my list of 10 truths about your home that conflict with what you might "learn" from watching HGTV. See Also: HGTV's 10 Best-Kept Secrets For Selling Your Home and HGTV's 10 Best-Kept Secrets For Buying a Home.
- Your home is not an investment: Really, it isn't. An investment is something that gives you money and an expense is something that costs you money. Therefore your primary residence is an expense. Real estate may well be a fantastic investment, but primary residences are only good investments to the extent that they're cheaper than renting.
- Pouring money into your home is not an investment: There's certainly something to be said for "investing" in your quality of life but in financial terms, it's a much better idea to put money in a savings account or use it to acquire an investment property than it is to pump cash into your primary residence of vacation home.
- The longer you plan to live in a home, the less financial sense it makes to pour money into it: If you are planning to stay in a house for five or 10 years, recognize that almost no home improvement projects qualify as investments. The reason is that projects like kitchen and bathroom remodels depreciate quickly: A 15-year old bathroom will likely be remodeled by the buyer, so it's not a value-add.
- Real estate agents are salespeople. Some are real estate experts. Most aren't: One of my biggest HGTV beefs is that the real estate agents who provide staging, remodeling and sales and value advice are introduced as "real estate market experts" on many of the shows. The truth: Getting a real estate license requires a few hours of classroom instruction and a multiple-choice test, much of it covering legalese and ethics. It's entirely possible to become a real estate agent without knowing anything about anything, and many agents are completely worthless. I wish HGTV would do a show called "I Hate My Agent!" featuring the stories of home owners who got screwed by Realtor-spin. There are plenty of them out there.