Comox Valley real estate experiences are real. But are those that appear on real estate reality TV? During the past few years “reality” television shows have appeared in many different forms. Among them are shows that focus on homes and properties. While many of them offer entertainment value; some even offer good tips for homeowners, and buyers and sellers of real estate. However, some also present bad information when it comes to Comox Valley real estate. Competent and well informed licensed Comox Valley real estate professionals can provide you with valuable information in this regard.
For example. some of these shows discuss the purchase price of a home within the context of a budget to renovate the home. Unfortunately, the discussions always focus on financial simplicity and they leave out information that is important to real buyers of homes. A recent episode of a show I watched discussed having a budget of $700,000 to buy and then renovate a home. The purchase price of the home was $620,000. The show presented the renovation budget as merely the difference between the budget and the purchase price.
Not so fast. While this type of representation may be acceptable for television, it is not acceptable for a “real” real estate transaction. Before any prospective buyer starts looking at all the best local Courtenay homes for sale, they would be familiar with all of the typical costs associated with the purchase of a home. For example, in British Columbia, the property transfer tax levied on the purchase of real estate is significant. Other costs include those associated with legal fees, costs associated with a mortgage, home inspection costs, etc. In total, these costs often represent thousands of dollars. Ask your Comox Valley realtor about the types of costs that could be applicable in your specific circumstance.
A second example of false reality in some of these shows concerns the investment and subsequent return on investment of the renovations made to a home. While watching one particular show, the following example was provided. The market value of the home before renovations was $450,000. Renovations that cost a total of $40,000 were made to the home and the home was valued at $520,000 after renovations. This would be very, very, rare in real life. The Appraisal Institute of Canada provides some statistical information that provides a sense of the actual return on investment for specific renovations in a home.
While some types of renovations may realize significant returns on the investment, others do not. In fact, some types of renovations could actually realize a loss according to the statistics gathered and presented by the AIC. Even these statistics, when applied in isolation of other market elements, may be misleading. A competent real estate agent should have all of this information available (or be able to obtain it) for his/her clients. Just because a Comox Valley home seller spent $40,000 on renovating a spectacular Crown Isle home does not mean that the home is worth $40,000 more in a specific market.
These two examples are provided merely to inform of the potential risks that prospective Comox Valley home buyers or sellers of real estate could take by drawing any conclusions about real estate, and real estate transactions, from television shows. Consult a competent and well informed real estate agent, and other competent and well informed real estate professionals for advice in their respective areas of expertise. Being better informed is a part of being prepared when it comes to the renovation, purchase, or sale of homes. If you are considering buying or selling real estate in the Comox Valley, and you need real estate advice call or email me to book an appointment with me. I would be pleased to help you with your real estate needs.
Contact Brett Cairns of RE/MAX Ocean Pacific Realty to have him help you meet your real estate needs.
by Brett Cairns