Market Conditions - Not New Carpets - Determine Market Value!

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Education & Training with The Lones Group, Inc.

The Lones Group, Inc.

Market Conditions - Not New Carpets - Determine Market Value!

Real estate professionals get asked on a regular basis by sellers about what improvements sellers should make to their homes to get them in tip-top shape and ready for the market. While things like cleaning the house, improving curb appeal and getting rid of clutter are obvious answers, that is not what this article is about today. Today, we need to address the liability that you may be opening yourself up to by making claims about improvements that will increase the sale price - when in fact they may not.

A great example of this was when a senior citizen asked her real estate agent what was needed to get her house ready for sale. The real estate agent involved in the transaction said that he felt it was critical that she replace all the carpets in the house.  He informed her that by doing so, she would absolutely get her house sold quickly. So the senior citizen - who, by the way, was on a senior pension - took her entire savings of almost $5000.00 and she re-carpeted the home.

However, even with the new carpet, the home sat on the market and did not sell.

The woman's son got in touch with the managing broker and said he was filing a lawsuit against the agent and the brokerage because his mother had taken her last dime to do what the agent had recommended based on his professional opinion. Now his mother left with no savings and no sale.

So what should the agent have done in this situation? Should he have recommended new carpets? In this particular example, the agent had not done enough research to realize that the price the seller wanted for her property for was above the current market value.

Whether you put in new carpets, new appliances, new paint, new whatever - if the property you are improving is priced above the market, it is not going to sell. Before you recommend any improvements that will take cash out of your seller's pocket, you need to be extremely clear about what that might or might not do for the seller. You must also look at supply and demand in the market.

I have worked in markets where the market was so robust that homes in any almost any condition were selling. I have also worked in markets where homes that were pristine weren't moving. So before you recommend that your seller do something they might regret, make sure you have done your homework and your research.

New carpets don't sell houses: the market conditions are what determines the price of anything on the market.

 

By Denise Lones CSP, M.I.R.M., CDEI - The founding partner of The Lones Group, Denise Lones, brings nearly three decades of experience in the real estate industry. With agent/broker coaching, expertise in branding, lead generation, strategic marketing, business analysis, new home project planning, product development, Denise is nationally recognized as the source for all things real estate. With a passion for improvement, Denise has helped thousands of real estate agents, brokers, and managers build their business to unprecedented levels of success, while helping them maintain balance and quality of life.

The Lones Group, Inc.
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Topic:
Real Estate Best Practices
Location:
Washington
Tags:
market conditions
home improvements
market value
market price
renovations
market research
new carpet
new paint
real estate
new appliances
ready for sale
curb appeal
denise lones
the lones group
home upgrade
zebra report
legal pitfalls

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Rainer
470,908
Kimo Jarrett
WikiWiki Realty - Huntington Beach, CA
Pro Lifestyle Solutions

Homes with L3 status sells quickly if the economy is robust and moving like a speeding bullet. It seems that this incident could have been avoided had the agent and his Broker devised a marketing plan after securing a CRM and illustrated to the seller when the listing was executed.

Agents should be cautious when advising sellers to invest in upgrades, especially with seniors who have limited savings and incomes. Yes to marketing conditions and no to improvements that would produce financial challenges. 

Mar 22, 2019 11:12 PM #1
Rainmaker
966,485
Jan Green
Value Added Service, 602-620-2699 - Scottsdale, AZ
HomeSmart Elite Group, REALTOR®, EcoBroker, GREEN

I'm surprised you don't have more comments on this post.  It's so important to ask ALL the right questions when listing a home for sale.  The agent probably wasn't aware that the seller used all of her savings to re-carpet, because she didn't ask!  

Mar 23, 2019 09:29 AM #2
Rainmaker
1,508,472
Marte Cliff
Marte Cliff Copywriting - Priest River, ID
Your real estate writer

I don't blame the son for filing a lawsuit. Telling the lady that new carpets would absolutely get her home sold quickly was irresponsible and just plain wrong.

There were so many better ways to handle that situation - but some "professionals" are not professional at all.

Mar 23, 2019 02:01 PM #3
Rainmaker
495,829
Mary Hutchison, SRES, ABR
Better Homes and Gardens Real Estate-Kansas City Homes - Kansas City, MO
Experienced Agent in Kansas City Metro area

Cautionary tale!  No agent should gte that certain improvements will net you X amount of money!  I usually approach sellers with a conversation about ...have you budgeted any funds to get the house in show ready condition? TO take care of fixes and small improvements here and there?  

Mar 25, 2019 06:21 AM #4
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Rainmaker
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Denise Lones

CSP, MIRM, CDEI - Real Estate Coaching & Branding
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