Many sellers are preparing their homes right now to get them on market. Spring is in full bloom and soon the kids will be out of school. In Arizona, our schools go into recess for summer break in mid May. So many will be looking to make the move. Danielle covers the whole spectrum of decisions that a seller needs to make.
Listing your home for sale: Should you update, or should you sell as-is?
When listing your home for sale, should you spend the money to make some home improvements, or should you sell it as-is? Of course, as in most questions of this sort, it depends on the particular improvements that your home needs, and it depends on the local market trends. It depends on your goals as a seller. It also depends on the condition of the homes that are your closest competition.
The Mind of A Seller VS. the Mind of A Buyer
In my experience, there is a different calculation that goes on in the mind of the seller, compared to that which is in the mind of a buyer. For instance, if the carpet in your bedrooms is original carpet in your 18-year-old home, there is likely no life left in it, we can all agree. If the seller were to replace it with something mid-grade, they could foreseeably spend about $1,000 – $1500, roughly. When the buyers see the need for new carpet, they calculate about $3,000 for said carpet, and they will mentally subtract that from the price they are willing to pay for the home.
I can’t specify exactly what the reasoning is, whether buyers want the option of upgraded carpet, or whether they pad the estimate with compensation for their effort, but that seems to be the thinking of the buyer, maybe you noticed it when you looked at a prospective new home?
Now add to that old appliances, older roof, HVAC, flooring and siding. These things may not all be worth the sellers attention, but all together, they add up in the mind of the buyer.
If a seller is not able to repair and renovate, or isn’t willing, then they need to be prepared for lowball offers, or perhaps no offers, depending on their list price. They cannot expect to get market value if their home doesn’t show well. Buyers will be overwhelmed with the number of updates needed, and if they are interested in doing the work at all, they certainly will want the home for a bargain.
Most Buyers Want A Move-In Ready Home
If at all possible, making the improvements before putting the house on the market will be to the sellers advantage. The majority of buyers want a home that is move-in ready. By addressing the condition of your home, you appeal to the majority of buyers, rather than that small subset of buyers looking for a fixer-upper.
The bottom line is: if you want top dollar, your house should be in the best condition possible. A buyer should be able to move right in without having to do a single repair. That means the major systems should be in working order, the home should be clean with a coat of fresh paint. The carpet should be fresh and the floors in good repair. Lighting and fixtures should be updated and colors should be neutral. Anything that is dated needs to go!
What If It Can’t Be Done?
I understand, some sellers are in a situation where they are unable to make many updates and renovations. In that case, they should do as much as they can to make the home as updated as possible, and then they should price the home accordingly. If similar homes have better amenities, your home will have to be priced below the average price that those homes have sold for.
It’s About Expectations
This goes to a seller’s expectations…if you understand that you won’t get top dollar and price your home accordingly, then you should have success. If you try to get a higher price…to “test the market”, then count on being on the market longer and count on lowball offers. Even as you drop your price, the length of time on the market will add up and you’ll face having a “stigmatized house”. Buyers will naturally wonder, “What’s wrong with that house that it has been on the market so long?”
This is when you really must know what features and amenities your competition has. You must understand what condition similar homes have been in and what prices similar homes have sold for. Having an experienced listing agent who is familiar with your market is of up-most importance.
Where to Start
Do you need to update something major? Like the roof, the HVAC, or refinished hardwoods? Some items are worth going the extra mile, some are not. With some updates, you may want to spring for the best available, depending on the comparative homes in your market.
On some items, like carpet, you may as well go with a mid-grade because top-of-the line flooring won’t give you a better return on investment.
Small Changes Make a Difference
Don’t forget the small items. Changing out light fixtures can make a big difference for little cost. Faucets and knobs are also a low-cost fix that can bring a home out of the 80’s into the 21st Century.
Painting is always a good investment and one of the least expensive updates a homeowner can do. Along with cleaning and de-cluttering, doing small repairs and updates will be worth it.