With housing inventory still lagging, sellers continue to have the upper hand.
What are upgrades?
Upgrades are optional features that buyers of newly built houses can select for more money. Upgrades may include higher-quality floor coverings, cabinets, windows and other amenities that homebuyers can incorporate into their purchased property.
When a buyer chooses an upgrade or upgrades, the term can cover everything from electrical outlets to kitchen cabinets. If a house is still in the planning stages, the buyer offers more input on changes before building commences. With an already completed home, upgrades can be made and added to the purchase price. Each buyer has the choice of introducing his own upgrades after the sale is complete.
Homeowners look to upgrades to improve their property. The right upgrades can improve a home’s resale value. For sellers who flip homes for quick profits, upgrades are a key aspect of their work. Some owners choose upgrades that do not match the market’s most desirable features. In those cases, the upgrades have little to no impact on the overall value. Extreme circumstances may see the changes contribute to a lower value among similar homes.
Examples of upgrades
A prospective homebuyer looks into houses available for sale in his city. After seeing the selection, he decides to work with a builder and construct a new house. Going over one of the builder’s top-selling plans, the buyer decides that he wants high-quality wood flooring in the living room. He also wants the kitchen cabinets to include special lighting options that turn on and off when doors are open. As construction begins, the homebuyer also decides to add more storage space in all the bedrooms and top-of-the-line fixtures to all the bathrooms. After completing the home, the new homeowner adds a few simple touches that were previously removed from initial plans. These are considered upgrades.
Thinking about your first home purchase? Use these practical tips to navigate the real estate world like a pro.