What if some houses are actually terrible? What if certain houses were built by people who shouldn’t have been allowed to pick any tile, flooring, cabinets, light fixtures, paint colors, or hardware? What if, for a moment, we entertained the idea that we needn’t be supportive of all builds, and that we should, instead, define terrible construction as terrible construction? There sure are some terrible houses for sale right now, and those have me thinking about just what makes a home a terrible house.
Pricing today, especially on the lakefront, can be difficult to understand. What makes a modest house on a poor lot worth $5M and what makes a nice house on a modest lot worth the same? What makes some offerings worthy of their sought after premium, and what makes me label other offerings as Sucker Offerings? At Lake Geneva, the differentiation often comes down to the location on the lake and the size and shape of the dirt. Frontage matters, of course, but over the past decade buyers have been slowly deciding that finishes might matter more. If there has been one common theme running throughout this blog for the past fifteen years it’s that Michigan is an awful place to vacation. But if there has been a theme that might be considered a close second, it’s that buyers love shiny things. Sparkly, shiny, things. Terrible lot? No matter, just throw some shine on it and you’ll get your price!
At least the market used to behave that way. The latest iteration of pricing asks that buyers pay a premium for a terrible lot WITHOUT the shiny things. Modest lot in a range bound association? You better have some SubZero appliances and Visual Comfort lighting, or so went the old narrative. The push of the last several months is to see if buyers will pay big money for basic lots and basic finishes. That’s a fatal combination in my mind, but the market will ultimately show sellers if their basic wares are worthy of massive premiums.
If you’re not used to touring expensive real estate, and if you haven’t built your own homes over the years, the definition of high end might not be so obvious to you. I have clients that know exactly what that moniker means, but increasingly the line between high end and low grade is being blurred by the spiffying up of low end things. Re-sale shops do this all of the time. Take an old dresser, fix the broken bits, shine up, or dull down the finish, and set that $50 dresser on the showroom floor for $500 and see who doesn’t know the difference. The real estate market is just like that, and these sellers are hoping and praying that you don’t know the difference between Schlage and Rocky Mountain door knobs.
So with all of that, this: Here’s how you can tell if a build or remodel is high end or not. Hardware. Did the seller put on some nonsense from Home Depot, even if said nonsense mimics the style of truly nice hardware? If so, you’ve just opened the door into a very low end build. Light Fixtures. Light fixtures are the jewelry of any space, and so it stands to reason that if the seller cut corners on one of the sexiest adornments of a structure, then you can bet they cut the corners you cannot see. Does a fixture need to cost $30,000 in order to be high end? Of course not, but don’t show me any sort of chandelier that costs less than $1500 if you’re expecting me to overpay for your chintzy build.
Appliances. This one is easy. If you want a premium for your home, please show that you thought enough of your potential buyer to install premium appliances. SubZero, Wolf, Viking, or something from the French. Sorry Other Stainless Steel Manufacturers, you didn’t make the cut. This is potentially the most obvious spot to make an impact if you’re trying to sell an upper bracket house. Fireplaces. Direct vent gas unit? No thanks. Not in a high end product unless mandated by your state…
Flooring. There’s a new thing called LVF, which is a terrible sounding acronym for Luxury Vinyl Flooring. This is akin to saying you have the luxury version of the 2003 PT Cruiser. It doesn’t matter how durable it is, it’s still a dog. I expect to see real wood floors, real marble tile, real. Oh, you finished your house really nicely with synthetic flooring? I’m out. Trim. This is obvious, but apparently it’s hard for people to catch. In a nicer build I expect crown moulding and proper trim. Don’t give me 7″ base on the main level and 5″ base upstairs. Did you really need to save the $3500 on that upper level trim in your $4MM lakefront offering? I expect lots of wood, lots of detail, lots of effort. I also don’t want to see MDF base or case. And I especially don’t want to see the MDF trim style that was popular in 2005 because Home Depot carried it.
Cabinets. I’m not of the opinion that all builds must have lavish cabinetry. But if you’re expecting me to overpay for your home, I better see something here. De Giulio would be nice, but I’ll settle for Plato or Wood-Mode. If you try to tell me the cabinets are “custom”, I know that in many instances custom cabinetry is cheaper than a nice Kraft-Maid line from a big box store. Counters. If you have that sandy-gold tone granite, everyone knows you just wanted the cheapest stone you could find. Don’t do this. Bath Tile: I don’t believe it’s necessary to import tile from Italy for every bathroom. But I do believe everyone should understand the difference between a nice bathroom and a cheap bathroom, and tile is a dead giveaway. Faucets. This is the easiest detail to nail, yet everyone seems to miss it. If your lakefront house is $10M+, I better see WaterWorks or Kallista here, or some French faucet that I don’t even know about. But if you give me a Moen brushed nickel faucet, I’m going to be sick. Faucets in lakefront homes should cost at least $500 each, and if they don’t, then what you have there is a Sucker Offering.
Carpet. Asking $1M+ for your house in this market? It’s wool carpet or bust. You’d be surprised, or maybe not, how builders will install apartment grade plush carpet in $5M lakefront homes. Don’t do this, but if you do, just know that I know. Windows. Vinyl? You’re out. Snap-in mullions? Also out. I need to see something from Pella, Marvin, or something upper end. Don’t try to show me an expensive house and tell me you opted for vinyl windows because you wanted something low maintenance. Patio/Sidewalks. If you want me to pay you $4.6M for your lakefront home, and you gave me a poured concrete patio on the lakeside with a metal firepit in the corner, I’m calling your bluff. This is a dead give away that your fancy lakefront home would be a $459k house if you put it in an off-water primary home neighborhood.
Of course there are other aspects to consider, but if you’re looking at a lakefront home and you can’t decide if it’s worth the premium, look at these bits of detail. If the seller gave enough thought to get these right, odds are you’re contemplating a reasonably nice house that might be worth the premium. If these details are missed, that doesn’t mean you need to run for the hills, but it does mean you need to pause and figure out if you’re really going to let the seller get away with those cheap door knobs.
Above, the undoubtedly high end De Guilio kitchen in the Basswood lakefront I sold last year.