Opportunities During Challenging Times in Bermuda

Ever hear the old adage, "There's his truth, her truth and the real truth" (in between)?

Well there's a similar one in the Real Estate industry, put forth as a humorous illustration answers to the question "What's this home worth?" Depending upon whom you ask, you might get two very different opinions for the same piece of property. A seller may view their house as a palace yet the buyer sees it as a dump. An exaggeration yes, but point still made. Sellers often have very inflated ideas about what their home is worth, (due to ego, memories and dollars previously invested). Buyers are heading to the market looking for the best deal possible, and the banks look at a property to establish as objectively as possible, (and in as real time as possible), their potential financial risk in loaning mortgage money on the property, (assuming financing will be required). They do this to be accountable to sound fiscal decisions as due diligence to their shareholders.

Bermuda Real Estate agents offer informal "Opinions of Value" information to prospective sellers - and they are more spot on than not when you have really experienced agents giving those opinions, but at the end of the day, it’s the appraisal that is the center anchor for market value determination. If financing is not involved, a home is worth what a buyer is willing to pay for it.Â

In a softer market, such as we are experiencing now, (meaning more inventory that is taking longer to sell), it is worth a Seller investing in a professional appraisal before they go to market.

The banks hire professional appraisers like me, who are certified through the Royal Institute of Chartered Surveyors, (MRICS) to conduct a thorough and systemized assessment of the property against the backdrop of the previous few months of market activity.

As a professional Appraiser since 1998, who needs to establish a home’s condition as "Excellent, Good, Fair or Poor", I can share with you that Sellers often miss an important opportunity to maximize the valuation of their property because of its condition so here are some tips to determine the highest possible value on your property:

• Maintain your home’s condition as best as possible by identifying what needs repair, improvement or updates. Then take action! Start with your kitchen and bathrooms. If the kitchen has those lime green tiny tiles and rusted dated appliances, maybe it’s time to invest a few dollars and update it. If the bath has those 1970’s standard 4 x 4 square tiles pink and blue, then it’s time to refurbish.

• Buyers are looking for value. When they see your dated kitchen or bathroom, it’s not so much a question of taste (although that can be a factor) but rather, they’re really questioning how soon they’ll have to put money into upgrades because it’s old and may need repairs or replacement of fixtures, etc. They want the MOST value for their purchasing dollar.

• Do you have those galvanized pipes throughout your home? If so, consider replacing them with PVC. If there are fuses in your panel box, then it’s time to replace them with breakers. If you still have linoleum on your floors and evidence of termites, then you have some work to do if you want to get top market value for your home.

• When it comes to upgrades and colors, etc., don’t overdo it. Keep colors neutral; get as much light in there as possible so your home looks sunny, cheerful and comfortable enough for a buyer to see THEIR future possibilities in your space. Get rid of your clutter and any old ripped up stuff. Buyers love to purchase homes that look cared for; put your home in its best possible light.

• If money is tight, you may have equity in your current home which you can borrow against to help you pay for the repairs /upgrades. There is no time better than now to approach your bank to obtain the funds to carry out the work. Banks are currently offering competitive rates; take advantage of this. Get advice on your improvement priorities, secure a few different quotes to carry out the work, hire reputable experts to do the jobs if you do not have the skills to do them yourself and then get them done.

• Then take good care of your place so you can secure top dollar whenever you do decide to sell. In the meanwhile, you will enjoy your own home more because of the work you put into it.

• In essence, during these shifting times, take advantage by bringing your home, your investment, up to par. And then whenever you do decide to sell, you’ll know you’re getting top dollar that a particular market will bear



Erna DeGraff, Professional Surveyor (MRICS) & Sales Associate, Rego Sotheby’s International Realty, Hamilton Bermda. Rego Sotheby’s International Realty. Rego Sotheby's International Realty is a full service Bermuda real estate company serving Bermudian and international home owners, sellers and buyers as well as commercial real estate investors, owners, landlords and tenants.