Frequent Seller Mistake: Offering a Credit in Lieu of Updating

Real Estate Agent with Long and Foster REALTORS®, Gainesville, VA VA License # 0225089470

Frequent Seller Mistake: Offering a Credit in Lieu of Updating 

No one enjoys the process of painting or recarpeting a home.  Sellers look at the effort it would take to move their furnishings to accomplish either task to freshen up their home before listing and quickly come to the conclusion that it would be easier for the next owner to do before moving.  The solution to overcome beat up or outdated walls and carpets?  Offer a buyer credit.

If buyers had only that ONE HOME to chose from, it would be a great solution.  But sellers do not list in a vacuum.  They are constantly competing with other homes.  Homes whose sellers decided to undertake the pain in the rear and freshen up the paint and carpet.  When that happens, no buyer credit is going to make the outdated or beat up home even compare to those that are move in ready.

Sellers logic their choice to offer a credit for such things away as, "Well the buyer can choose their own colors."  In theory that's true.  The reality is that the freedom to choose colors and renovate is rarely the way a buyer chooses to go, despite the buyer incentive or even a lower list price.  Those buyers are a rare find.  Move in ready wins ninety-nine percent of the time.

And if you do leave it to a buyer to do, they will never feel that the credit offered is what the actual cost will be.  As a general rule of thumb, sellers underestimate and buyers overestimate.  

The smart way to get picked before your competition is to get your home move in ready.  Deal with the inconvenience of the work and expense for the best turnaround time and to make the most money on the sale of your home.  Forget the buyer credit when it comes to carpet and paint.


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Andrea Bedard
Thompson Company, REALTORS® - Silver Spring, MD
M.A.; REALTOR® Silver Spring, MD and beyond

Love your line "sellers do not list in a vacuum" Chris Ann. Many buyers can't picture the same space freshly painted or recarpeted .. they will all move on to home that doesn't require seeing the potential.

Jan 16, 2014 11:43 AM #1
Anja Kerstens
Coldwell Banker Residential Brokerage - Morgan Hill, CA
GRI, CDPE, CHS, ASP, Selling Silicon Valley Real

Important to note that replacing that carpet or color with a neutral color.  No buyer is waiting for a seller to replace the carpet with an off color that they like or happens to be on sale. Neutral nothing else!

Jan 16, 2014 01:03 PM #2
Gita Bantwal
RE/MAX Centre Realtors - Warwick, PA
REALTOR,ABR,CRS,SRES,GRI - Bucks County & Philadel

Thank you for the post. I hope home sellers will read this and take your advice.

Jan 16, 2014 09:05 PM #3
Fred Griffin presently on Leave of Absence
Fred Griffin Real Estate - Tallahassee, FL
Licensed Florida Real Estate Broker

     The other issue is Lenders who will not allow a "Cash credit from Seller to Buyer at Closing".   Paint it now!  

Jan 16, 2014 09:31 PM #4
Tom White
Franklin Homes Realty LLC (615) 495-0752 or - Franklin, TN
Franklin Homes Realty LLC, Franklin TN

Chris Ann, you are so right! If our sellers can afford it, we always tell them that buyers prefer to see the home with the new carpet and paint. Many buyers just don't want the hassle and wonder where their stuff will go while the work is being completed.

Jan 16, 2014 10:27 PM #5
Elizabeth Weintraub Sacramento Realtor Top 1%
RE/MAX Gold - Sacramento, CA
Put 40 years of experience to work for you

Sometimes what you've got to do is show a seller all of the competition and ask which home the seller herself would buy. Would it be her own home? Probably not. She'd take the one that was ready to move into, just like every other buyer out there.

Jan 17, 2014 01:46 AM #6
Chris Ann Cleland
Long and Foster REALTORS®, Gainesville, VA - Bristow, VA
Associate Broker, Bristow, VA

Andrea:  It's all about being the best among those listed.  Best bang for the buck.

Anja:  I'm surprised I forgot to make that point.  Thanks for the assist.

Gita:  Most times they do.  If they don't, they usually end up wishing they had in the end.

Fred:  And it's really no credit at all if a cash poor buyer already needs closing cost help.

Jan 17, 2014 04:14 AM #7
Chris Ann Cleland
Long and Foster REALTORS®, Gainesville, VA - Bristow, VA
Associate Broker, Bristow, VA

Tom:  Each party has the same concerns about the work.  It just benefits the seller to take on that hassle and get it done before listing.

Elizabeth:  Showing the competition in person is a great way to get the message to sink in.

Jan 17, 2014 04:16 AM #8
Marshall Enterprises
Marshall Enterprises - Saint Michael, MN
Antiques, Lawn Care, and Trashouts

You are so right.  No one wants to purchase a home that needs painting, carpet or other "essentials" RIGHT NOW.  Buyers want to close and MOVE!  

Very smart post. 


(And, thanks for your comment...I remember your loss.)

Jan 17, 2014 04:36 AM #9
Chris Ann Cleland
Long and Foster REALTORS®, Gainesville, VA - Bristow, VA
Associate Broker, Bristow, VA

Ron:  You're welcome and thank you for remembering.  Clearly we are both animal lovers.  Thanks for your comment here.

Jan 17, 2014 04:55 AM #10
Donna Foerster
HomeSmart Realty Group - Parker, CO
Metro Denver Real Estate Agent

Chris Ann~ Whenever we work with sellers we remind them that it's better for them to do the work vs. offering a credit. As you said, they'll get a better price and they will sell quicker. Move-in ready does make a difference in the current market.

Jan 21, 2014 01:01 AM #11
Beth Bromund
Coldwell Banker Weir Manuel - Rochester, MI
REALTOR (248) 651-3500

Chris, great tips!  Elizabeth, I love  your approach to helping the sellers see why it's in their best interest to make the changes.

Jan 26, 2014 03:38 PM #12
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Chris Ann Cleland

Associate Broker, Bristow, VA
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