New Carpet or Carpet Allowance?

I completely agree that replacing a carpet will inevitably bring a positive return on the seller's investment.  However, I find clients regularly balk at the thought of replacing the carpet and come up with many reasons to support their objections, some of which you mentioned in your blog.   When we meet with such resistance, we strongly encourage the seller to get a couple of carpet dealers in to give them a quote on replacing the carpet.  This at least allows the seller to get a better idea of the cost to replace it as well as how much they should consider reducing the selling price by if it becomes a deal breaker with a potential buyer.  As you noted, buyers typically tend to ask for a price reduction worth much more than the actual cost of replacing the carpet.  Great job on the before and afters!

Shar - That pink carpet is absolutely scary!  You gave great, solid advice to this client.  I wasn't aware that you could take that long to pay down a carpet, so that's great information.  Changing the carpet was crucial, in this case.  Great post.

When a client balks at replacing flooring or shingles I always tell them to get an estimate ready for buyers.

I feel they are further ahead if they replace it so there are no negative vibes about the house. With all the competition out there the buyer can just buy the house without the problem.

No doubt about it.   I would tell them to get the new carpet.  Buyers, now as in the past, don't have the money for these improvements once they pay the closing costs and the downstroke on the house.

Great job

I worked on one very old home where the carpet was 30 years old and trashed.  We only had 3 days to get the whole place painted, cleaned and staged.  I encouraged the realtor to put off the open house and add new carpeting, but they decided to go with the 100-year-old black linoleum that was under the old carpet.  I think it really made it take longer to sell than it should have.  A few more days would have been worth it.

New carpet - the pink must go!

Point well made, for sure!  It is interesting what sellers will turn a blind eye towards, but it is the splinter in the eye of the buyer! The statement of offering far less than asking, much reduced from the actual cost to just do the carpet is true.  Good post!

As home-owners we get used to our surroundings, and like an "old shoe" it might feel good to the original buyer who still recalls all the good ole times on that carpet...but would the prospective buyer want to come in and wear your old shoes? I think not! Make your home "sole" happy and get the new carpet without giving it a second thought.  As the other commenters have suggested there are various ways to swing the cost.

Thanks Shar for sharing your thoughts...too many realtors have told me it's just about the right price...oh were that true we would not have a career field!

Giving allowances was in the former century!  The majority of the buyers, with the exception of investors, want move-in ready, hassle free houses.  Does a seller want to miss out on a possible buyer and wait for the buyer that can look past or wants the pink carpeting?!  Excellent Before and  After photos.

Wow! What a difference that makes... Your advise to clients is right on spot. The first impression when viewing a propery is the key to succes and the carpets are the one that drives clients away.

Great post!

Hi Shar - Where extreme colors are involved I would go with new carpet. Otherwise I prefer a flooring allowance. We never know if a buyer might prefer tile or wood instead of carpet.

You are dead on, not fixing things like this in advance costs far more.

Replacement beforehand is definitely the better option.  With all of the fraud still occurring, underwriting guidelines do not look favorably on any repair credits from a seller. 

HUD guidelines state that "Certain expenses, paid by the seller and/or an interested third party, on behalf of the borrower, are considered "inducements to purchase" and result in a dollar-for-dollar reduction to the sales price of the property before applying the appropriate LTV factor."  If you do an allowance, HUD requires the underwriter to essentially reduce the sales price by the same amount.  The buyer will end up having to pay for the carpet out of their own pocket.