Functional obsolescence is the name that real estate appraisers give to weird features in houses. There is a principal of value called the law of conformity. This law states that if all the houses in the neighborhood "conform" to an accepted standard, it enhances the value of that house and all the other houses in that neighborhood. If a house has "off the beaten path features" it decreases the value of that house. An eight by eight hot tub installed in a ten by ten bathroom would be an example of functional obsolescence.
When you buy that house with the indoor atrium in the middle of the living room, be aware that five years later you will be selling a house with an indoor atrium in the middle of the living room. Your buyer might not think it is as cool as you thought it was when you bought it five years earlier. Functional obsolescence decreases value.
Often, Functional obsolescence is created by age. Consumer's desires and tastes change as the years go by. A four bedroom, one bath house would not be unusual in 1940. Today that house is functionally obsolete. It would lose value because the average, ordinary consumer today would want at least two baths. Often, when a handy buyer is looking at that functionally obsolete house with only one bath, he knows that he can spend $5000 and install another bath and enhance the value by $10,000.
When you buy that house with the bowling alley in the family room, know that one day you will be selling a house with a bowling alley in the family room. Your buyer will buy in spite of the bowling alley not because of the bowling alley. Functional obsolescence decreases value.
Functional obsolescence is part of Hendersonville, North Carolina real estate. If you buy that house where you have to walk through one bedroom to get to another bedroom, you will soon be selling a house where your buyer has to walk through one bedroom to get to another bedroom. It will lower the value when you sell. Govern yourself accordingly when you buy.
Please don't be an ostrich. Put your head in the sand and pretend it doesn't matter. It matters to your potential buyer. Real estate brokers hear this all the time, "We would buy this house if the refrigerator were not in the living room." What the buyer really means is is how much will it cost to get the refrigerator out of the living room and into the kitchen. Mr. Buyer will buy this house for the value minus what he believes it will cost to fix the functional obsolescence, if it can be fixed.
Be aware of functional obsolescence when you buy real estate in Hendersonville. If you need any help buying or selling real estate in western North Carolina, contact me at www.RonClimer.com or www.hendersonvillekw.com or 828 290 1000
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