There’s an old adage in real estate: Never buy the most expensive home in the neighborhood. But what happens when you want to? What happens when the best home in the neighborhood really is the best home and you want it?
Obviously the idea behind the adage is that if you buy the least expensive home in the neighborhood, your property value and capital appreciation would be “pulled” up with the neighborhood as a whole and thus the gains you’ll experience will be greater than more expensive properties. I’ve seen this and it is undoubtedly true. But so what? If the only goal of home ownership is capital appreciation, then sure, it makes sense, but home ownership is so much more than that.
I have always taken the position that I want to try and buy the best of something that I can afford because by buying the best, I’ll never have regrets. Now some might call this wasteful or missing the big picture. I however take the position that the difference in money between something outstanding and something good, is seldom large enough to warrant the trade-off. For example, a few years ago I listed and sold a home that the largest lot and the best view. The home had a pool which most lots in this neighborhood couldn’t handle; it sat atop the hill with views as far as the eye could see, with snow capped mountains in the distance every winter. When I met with prospective buyers I would tell them, this is the best and only one person can own the best. Many would be buyers hemmed and hawed. “Sell it for money like the comps down the street,” they would say. I explained that quality costs and only one can own the best. Believe it or not, I’ve I actually sold this home three times. When it was new I told friends of mine, it was the best and they went for it. They put it tons of upgrades and spared no expense. The second owners paid a substantial premium for that home at a time when no one was buying anything. The third owners did the same and in each case they gladly paid the premium and I know for a fact that if you ask any of them they would tell you, it was worth every penny. The old sales master Zig Ziglar used to say, “It’s better to apologize for the price once, than the quality forever.” As many of you who follow my writings and visit my
Facebook Business page know, I just finished a substantial remodel of my home. It was Hell, but the end result is gorgeous. I probably spent 15% more than I needed to get all the details and amenities I wanted. Let’s face it, being in the home-selling business I see lots of cool features. I can tell you unequivocally that people will always pay when a home has been done up correctly and the design vision of home complete. Take for example a mid century modern home. When an owner of an Eichler for example, has decorated in the Atomic Ranch or Googie furniture, Eames etc. style, the house looks incredible and people jump at it, fighting over it even. Same is true for any architectural style. I recently saw a Craftsman style applied to a basic tract house single story. The owner had sandblasted the eaves and painted them brown. The siding and stucco were an olive color, the windows had been done in with the red clad on the outside, wood on the inside, a very expensive window, yet the package was so convincing that you’d think it was a Greene and Greene in Pasadena somewhere. The seller wanted a 30% premium. A side bar on that home: It didn’t sell for the premium the owners wanted, but not because there weren’t takers, but because the owners found that they could make a small fortune renting it on AirBnB because the style was so cool. This is a new and unique time we find ourselves in isn’t it?
The point I’m trying to get across is that in every neighborhood, in every city, someone bought the most expensive home just as someone bought the least expensive. Someone will always be willing to pay the premium. Do you get every penny out if you do buy the most expensive or make yours the most expensive? Not always for sure, but that doesn’t mean it wasn’t worth every penny you spend. Remember a home isn’t just an investment, it’s your sanctuary; the place you raise your children and create the memories that last a lifetime (Search available inventory here).
I have a philosophy on money and savings and it’s this: We have to plan for the future and live for today and we won’t know if we got it right until it’s too late. Thus I try not to be too hard on myself when I want something a little extravagant so long as I can afford it. On that note, I have to run. I have two clients buying the most expensive homes, on the biggest lots with the most incredible views, in a new home neighborhood this morning and I’m so excited for them, I can barely contain my enthusiasm. Someone will always buy the best and I’m thrilled to have it be my clients.
Published on 2016-03-21 09:33:44