Real Estate

When It Comes To Real Estate, Bigger Isn’t Always Better

When it comes to selling, most real estate agents will tell you that bigger…isn’t always better. Studies show that larger mansion type homes spend way more time on the market, and therefore end up selling for way less than what the seller originally asks for. Even buyers who are financially well-off, and have access to a slew of resources to fix any home the way they want it, that type of client is looking for a home that seems the most move in ready for their personal wants and needs. Just because a home is large, doesn’t mean it’s of the buyers standards. In real estate, it truly is “quality over quantity.”

“Just by adding square footage doesn’t mean that it contributes proportionally to value. For example a 30,000-square-foot mansion built in an area where the typical home is more like 10,000 square feet doesn’t mean that the value is going to be triple its neighbors. It would likely be worth more, but not proportionally,” said Jonathan Miller, a New York-based real estate appraiser to Mansion Global Magazine

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Miller went on to discuss how the largest home in any given neighborhood is often the least desirable. Maintenance of the homes is always harder, even if you have the financial means to hire an entire staff, many buyers don’t like the idea of having a bunch of different strangers in their homes every week doing different things. You don’t always know who is meant to perform what job because it often can be someone new every time, leaving homeowners to feel vulnerable in their own home. 

According to Miller the modern day buyer is looking for the details in a home that make it unique. Buyers crave their home to have something no other home has, whether that be a killer view, a specific architectural design, smart accessories, etc. all of those elements are worth more than the square footage of a home. 

Larger homes also have a major issue when it comes to selling. More often than not homes with a large amount of square footing go through multiple price cuts before actually selling, at that point though sellers will gain less from their investments. Buyers will often look at large mega mansion type homes and see it as more of an office building to maintain than the place they want to live full time. What ends up convincing them that these large properties can be their home is that large price cut. 

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Additionally, younger millionaires that are now in the market for their homes are maintaining the quality over quantity mentality, and are looking for homes that have the best functionality over size. 

“Millennials who buy houses between $2 million and $4 million want functionality. It’s very rare that you see them buying mansions where you have to take care of huge lawns and enormous houses. They want simple, they want smaller square footage and they’re thinking about how the floor plan flows. It’s going to make these megamansions obsolete,” said Alexandra Sierra of Compass Florida Realty.

However, the real estate industry is seeing a huge increase in millennials attempting to make it as an agent. One of the major reasons for this is the type of market that we’re dealing with now when it comes to selling homes. The entire marketplace is digitized, a world millennials are experts in. Additionally, this generation knows the best way to communicate amongst each other, so when agencies are faced with these younger millionares who are making their money through posts on the internet and brand deal vacations, they know the exact type of agent that can be used to speak that language.

Generally speaking, however, more real estate agents are looking to break away from working with architects who continue to work on “mega-mansion” type projects because of the decreasing relevance they bring to the market.