Real estate truths you won't learn from HGTV
Filed under: Home, Real Estate
HGTV may be the most popular source of real estate know-how in the country, and I'm a big fan: The shows are entertaining, and often a source of good ideas. 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.
Reader Comments (Page 1 of 1)
5-14-2009 @ 6:04AM
Philippine Homes For Sale said...
I read the follow up links of your blog. and I see very use full to me the information you share. thank’s
Philippine Homes For Sale
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5-14-2009 @ 6:04AM
Philippine Homes For Sale said...
I read the follow up links of your blog. and I see very use full to me the information you share. thank’s
Philippine Homes For Sale
Reply
5-14-2009 @ 9:56AM
Perno said...
I hope a realtor weighs in on this.
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5-14-2009 @ 12:29PM
Angel said...
Perno, you got your wish... I'm a realtor weighing in on this. I think his post is absolutely accurate! The schooling and the exam to receive your license does not teach you the things that you need to know! There are some realtor's, such as myself, who actually continuously learn through experience, asking questions of brokers and other realtors, by reading, and by voluntarily taking courses. These are the realtors who are always trying to achieve more and stand out among their peers. The problem is that there are a lot of bad realtors who give the rest of us a bad name! My opinion is that every point made in this blog is completely accurate!
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6-27-2009 @ 2:43PM
Ray LeBrun said...
And another one... I'm a Real Estate Broker as well and weighing in , it was stated that Real Estate people are sales people... that sometimes insults salespeople... let me explain, because one succeeded in passing your state exam, getting their license, agent or Broker level, states are different, has no bearing on your ability to sell, qualify a buyers/investors needs, or understand how to conduct a mutually positive experience for your client and yourself.
We are supposed to be a fiduciary for the client/and their interests, which also means the agent needs to understand and client needs to state truthfully their interests/goals.. Both parties need to understand what it is they are trying to achieve...if not they are both doomed to be disappointed and then the agent ends up being a tour guide... and the client repeats the process. I find that if I and my client understand specifically what we're trying to accomplish, "our" success rate increases, the experience improves. Example is I focus on Coastal Real Estate for adults... children/families are fine, I have one, but my area of expertise and value is best provided to clients that are looking for homes/investments for themselves.... less of a focus on schools, space for swing set etc and more toward access to the water, golf dining...Bottom line is select an agent that focuses and doesn't try to be all things and you'll both be happier. Jerry Maguire was right... its about quality not quantity.
5-23-2009 @ 1:18PM
Paula Burt said...
Ummmm.... #1) you said "here's my list of 10 truths..." but there are only 4? where are the other 6?
#2) I agree with both you and Angel. In my pre-licensing course, we were told straight up that these courses are designed to give us a basic overview of the industry and all the information we need to pass the exams. They stated emphatically that once you pass the exam and get your license, that is when your education in the real estate industry begins! Those of us who take that to heart do all we can to learn from every experience and exposure we encounter. I have told the top agents in our office that when they speak, I intend to be a sponge, even when I'm not personally involved in the conversation they may be having, and have asked if it is okay to come over and join in so I may learn more from them. Not one has ever said no, and they are more than happy to have me come ask them questions or for advice, etc. Wish that more of us would do that, on both sides of the equation.
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