Too much carpet, a sloped backyard or Formica kitchen counters can reduce the value of your house by thousands of dollars in Dallas-Fort Worth when it’s time to sell, according to research by iBuyer OpenDoor.
How many thousands? Funny you should ask.
The real estate firm ran numbers specific to the Dallas-Fort Worth housing market and compiled a list of the top five detractors:
- Carpet as primary floor type – subtract $8,400
- Commercial neighbors – subtract $5,000
- Formica or tile kitchen counters – subtract $4,900
- Sloped backyard – subtract $3,700
- Located on a busy street – subtract $2,500
So, what do home buyers have against carpet?
“I think folks living in Texas or moving to Texas, given the heat, prefer flooring that’s either hardwood or laminate or vinyl plank just to keep the heat down and the electricity bill down as well,” said Greg Hiltz, Opendoor’s general manager for the Dallas-Fort Worth area.
And Formica and tile kitchen counters?
“Those two (carpet and Formica) were what surprised me the most,” Hiltz said in an interview with the Dallas Business Journal. “But when you think about the transition that Dallas is going through, with so many areas that have so much new inventory, it’s not hard to walk into a brand new home that has every updated feature or at least a lower end builder grade — that’s the granite countertops, stainless steel appliances — all the things you think of when you think of new construction or a fancy remodel. Those two characteristics are more indicative of when upgrades haven’t been done and someone owned a home but didn’t reinvest in it.”
San Francisco-based Opendoor analyzed data from home sales between January 1 and March 31 to determine the five features that are reducing home values the most.
As an iBuyer, Opendoor’s business model entails buying homes directly from sellers, repairing them and selling them.
While sellers can’t do much about having commercial neighbors or being on a busy street, sellers with value-reducing aspects that can be controlled should consider fixing them, Hiltz said.
That’s a cost-benefit analysis that has to be made on a case-by-case basis, he said.
“We wouldn’t replace carpet in a living room that’s in great shape,” he said. “But if we get to the point that we think that carpet needs to come up, that’s the point where we would consider a laminate flooring or tile flooring to have an updated, more modern look.”
“You can’t just paint with a broad stroke that all carpet is bad,” Hiltz added. “You just have to have an understanding of how will the market receive this carpet, what does my neighbor’s home look like, what do the comps look like. If you’re in a neighborhood where everything is upgraded, that’s probably the time to go ahead and upgrade your house, as well, if you’re going to put it on the list. But if you’re in a neighborhood where that’s common, we wouldn’t encourage doing extra renovations just for the sake of renovations.”