By Marilyn Melia | CTW Features
Homes don’t have to die of old age.
But just as high blood pressure or inactivity impacts humans’ longevity, older homes have their own predictors on whether a buyer will purchase it to live in or tear it down.
Homes which haven’t been updated and located in highly desirable neighborhoods without nearby buildable land are most likely fated for the bulldozer.
Being “functionally obsolete” compared to nearby homes – say one bath vs. others with two or three, or no central air when that’s the norm, or a one car garage when others have room for two or three cars – marks a “teardown,” says Vincent Cyr, Keller Williams Real Estate, Westchester, Pa.
Ken Johnson, a Florida Atlantic University real estate professor, offers a formula: When the value of the newly constructed home will be three to five times the cost of the old home torn down, the teardown makes economic sense. If the value of the newly constructed home and lot is less than three times the purchase price the teardown, it “runs the risk of being underdeveloped for the neighborhood.”
In 2020, six percent of newly constructed homes were built on lots where an older home was razed, and percentages were significantly higher in New England, Pacific, and mid-Atlantic regions.
For sellers of older homes in pricey neighborhoods, the question is “Should they invest in some remodeling or even the typical pre-sale spruce-ups, like painting?
If all a home needs is the typical pre-sale preparation, it’s more likely to be loved and lived in by a buyer.
Some buyers “want a vintage home in great shape,” observes Francine Viola, Coldwell Banker Evergreen Olympic Realty, Olympia, Wa.
Consulting with agents on an older home’s appeal helps define the proper marketing plan.
When a home is clearly a teardown, selling it as such can yield a greater price, says Viola. “Instead of thinking about present use [buyers] start thinking about future use and possibilities.”