If you purchased a home between 2004 and 2007, you need to be very cautious as you move forward in your investment in the home.  When my parents bought their first home in the 1970s, they knew that with their high interest rate and serious savings their investment would pay off at a gentle rate in the future.

My generation has been completely spoiled.  In 1999, we purchased a house on Boscobel in East Nashville for $145,000.  We sold that home in 2006 for $314,500, a return of over 100% in less than 7 years.  My parents would have double triple axles and herkies for that type of return in such a short time.

Those urban legend stories spread like wildfire in the early 2000s causing everyone to jump into the Nashville housing market thinking they would return numbers like those seen in 37206, 37204, 37215 and several other zip codes.

Fast forward to 2004-2007.  Buyers were purchasing in multiple offers, paying top dollar and appraisal was no issue.  Enter 2008 and the slow down nationally.  HEAR ME CLEARLY!  Nashville has not experienced what the rest of the nation has, however, values in certain areas have leveled or only slightly appreciated.  Now, Gen X and Y buyers typically stay in a home for three to five years, and then we’re ready to move on to the next adventure and space.

The 2004-2007 buyers are now getting that selling bug.  If you’re in that mode, it’s okay, however, you do need to know a few things.

1.  Don’t expect the return your home buying friends got in a different economy.

2.  Price your home based off strong professional advice, not based off what you think is fair in the cosmic scheme of things.

3.  Don’t shoot the messenger.  The real estate agent/REALTOR you choose can’t be afraid of the situation.  Be ready for the value and listen.

4.  Run from the question, “Can we just TRY it?”  ”Trying it” can stigmatize your home for a future sale.  You’re better off to hold and wait then succeed in a later market than to set a lofty bar and mark your home as a market “reject.”  I’ve shown several homes recently that have been on the market for 190 days plus or pulled-and-relisted several times.  Every time, the buyer is scared of the home because it’s been on the market so long.  It makes the buyer worry that they, too, will have issues when selling in the future.  The issue typically isn’t the home, condition or location…it’s the price!

5.  Don’t over-improve.  Build that new portico or fancy back porch cover because you WANT it, not to add value.  Install that Viking range because you want to use it in your time there, not to add that price to your future sales price.  If you pay $240,000 for a home, then add $50,000 of goodies that don’t return value, that doesn’t mean you can sell it for $240,000+$50,000+$extra cash.  Before you do anything, ask a professional..seriously..I’m not joking.  And don’t ask just any professional.  I can’t answer all the questions, but feel free to email me; and, I’ll gladly, kindly and strongly tell you “yes” or “no.”

6.  Don’t be afraid to rent your home out.  This is the big no-no for REALTORS to say.  It goes against everything we are taught.  Frankly, I don’t need the listing business bad enough to mislead a seller down a wrong path in this market, simply to get my sign in the yard and start generating buyer leads.  Don’t let your home be a lead generating machine for someone who’s not direct enough to advise you to rent.  Being a landlord isn’t that bad.  I do it every day.

Tagged as: nashville real estate