Barbara Corcoran Just Lost $1 Million on Her Home — How To Avoid Her Real Estate Mistake
Written by
John Schmoll
Edited by
Cory Dudak
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Barbara Corcoran is well-known from the popular TV show “Shark Tank.” She is more than a Shark on the show, though; she’s an acclaimed personal finance expert, speaker and lover of all things real estate.
Her New York City penthouse has been in the headlines recently, thanks in large part to her decision to sell it at a $1 million loss, according to MoneyWise.
Corcoran has resided in the home for a decade, and she can surely weather the loss, but the situation provides insight into how Americans can avoid a painful loss when it comes time to put their house on the market.
Focus on the Right Renovations
Corcoran famously bought the penthouse for $10 million and made $3 million in renovations. The mogul did that in large part by gutting entire sections of the penthouse and flipping floorplans, according to The New York Times.
Americans should be more purposeful in making renovations to a home before selling. It’s difficult, at best, to receive dollar for dollar back on changes, but focus on areas that provide better return on investment (ROI).
Improving curb appeal is a great way to return value. Calculated upgrades to the kitchen and bathrooms can also provide good ROI, particularly if you modernize both areas.
Work with a Real Estate Agent
Working with a real estate agent does bring added cost. However, they can be well worth the value when it comes time to put a house on the market. Not only can real estate agents help negotiate offers and deal with buyers and their agents, but they can also assist in renovations.
A real estate agent brings a fresh, objective mindset to a house. They don’t have emotional attachments. This insight helps real estate agents provide guidance on renovations to help improve the salability of a house, not to mention other ways of upgrading its appearance.
Even if you’re not planning on putting your house on the market immediately, chat with your real estate agent. They can help guide decisions to help you avoid costly mistakes that will hurt you when it’s time to sell.
Understand Your Local Market
Just because you upgrade a certain area of your home, that doesn’t mean prospective buyers will want to pay for those improvements. For example, you want to make improvements that matter to local buyers.
Every real estate market is different. Some upgrades may not be valuable in all markets. Other factors influence local markets, such as inventory, job growth and more. A real estate agent can help you navigate renovations in light of those conditions. Americans can also consult local market reports via the National Association of Realtors to gain insight into the health of the real estate market in a specific city.
Maintain a Balance Between Emotion and Investment
For years, Corcoran famously pined for the penthouse she’s now selling. This may have influenced her renovation decisions, as she’s known for buying houses based on the spot, not the space. Taking the penthouse down to the studs revealed she had a vision for this particular property.
Just as emotion can be tricky when managing investments, the same can be true when renovating a house. Enjoyment is important, but it’s best to be done in light of what will return value, especially if it’s not your forever home. Taking a loss on a home sale is rarely fun, and even less so when costly improvements are made. With measured decisions, Americans can make fun upgrades that will enhance ROI without losing their shirt in the process.
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