Put an Odometer on it!

As I've shared with you before, If you're not growing, your shrinking (I'm in trouble!).  Each of us should spend part of our week sharpening the saw- gaining knowledge, insight, and abilities.  We should challenge our thinking, techniques, and style to always lean into our personal and company strengths.

On that note, in some of our more established communities, we face resale and foreclosure challenges that are unique because they are the same floor plan!  The buyer struggles to not see that as "same-same" because their eyes tell them they are the same.

Well, when you pop into a straight-off-the-showroom-
floor new car, your NOSE and eyes tell you it's brand new compared to a "same body style" version of the car that's 3 years old.  The leather has some visible sings of three years of wear. But more than this, The ODOMETER of a new car tells you it has 3 original miles versus the 52,000 miles on the used one.  In other words, even a novice can tell the difference, even if the manufacturer has only made minor adjustments during that period of time.  Now I bring you back to housing- to sell new you must PUT AN ODOMETER ON THAT RESALE!  The attached article is a terrific way to remind you where the odometer lives in a resale, and what you sell has ZERO miles on it.  

Here's some fun facts- that are real, so they are really NOT fun for me: I live in a '99 built home that I bought in 2010.  I know, the cobbler's kids have no shoes, right?  Well, I really bought the property, and the house came with it.  But, even I fell prey to the same lie I am trying to help you avoid.  The reality is that ALL manufactured devices have an odometer, not just cars.  I fell prey to the lie that the house was recently cleaned, so it LOOKED ok.  The appliances worked, the A/C worked, the pool worked.  At the moment I test drove it, everything looked OK, and what a "steal" i got, I told my friends!

Well, let's dig deeper.  In the 2 years I've owned it, 

  • $480 - 2 A/C repairs, the last one with a "nister, yer gunna wanna replace this, I can't keep it on life support" from the repairman. 
  • $10,000 - roof replacement - it's started leaking because it's -well- 13 years old! 
  • $600 -  I've had to replace the dishwasher, and the fridge is on the fritz. 
  • $500 - Every toilet has had to be serviced, snaked, and had the flappers and cutoff devices replaced.  
  • $600 - pool didn't restart this year, because the equipment is "old" - boom, another $600. 
  • $1000 - emergency plumbing from 2 burst pipes, and the drywall, paint, insulation, and trim that had to be fixed because of it
  • $5300 - MY A/C bill last year (thats about $450/month, average!) The inefficient wooden windows leak, and the attic is underinsulated - combined with the three 10 seer air conditioners has handed me three electric bills over $600 this hot summer! .  I compare that with bills I see for our models of similar size and specs, which were less than HALF!
Upcoming maintenance - Cosmetically, the carpet is old, and my wife wants it replaced, probably with hardwoods.  The kitchen stinks, my lovely wife calls it the "barbie" kitchen, because full sized plates don't fit into the laminated undersized cabinets, and a full sized pan doesn't fit into the 27" oven!  Once I am complete over my 3 year plan with "modernizing" this home up to just the standards we build with today, it will cost me another $30,000-$40,000.  I am not asking you to feel sorry for me  - I love my property!  But, I didn't get a "steal".  I got a 10 year old house with 120,000 miles on it.  I forgot to check the odometer well.

Maintenance is normal, it's going to happen in any home, but there is simply not much maintenance in the first 5 years of a house.  I FORGOT TO ADD $1,000 a month to my house payment for line item: maintenance when I looked at my bank-owned "steal".   Don't let your customers make the same mistake I did!  There is a reason that you can buy a 2010 Toyota Camry for thousands less than a 2012, and there is a reason that a home built even in 2010 SHOULD cost less than a brand new one with the most current efficiency standards and features!

Where is the odometer?  It's in the attic and/or basement.  It's the A/C units.  It's the water heater.  It's the roof, the appliances, the carpet and other flooring, it's the bathroom fixtures, the closet rods, it's the door hardware, even the lawn!  It's the insulation (yes, even that wears over time).  It's the driveway, and it's the windows.

To sell new versus used, recognize that both have an odometer - but yours is set at zero.  Ask the customer to help decide where the odometer is on the home they are comparing, and how much monthly they should be budgeting for the inevitable items that will need attention.  Put a pencil to it, and quite frankly, I can't afford to buy used again - your buyers should feel the same way!
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