It’s common knowledge that purchasing a home will set you back several thousands of dollars on top of the purchase price. Closing costs and fees can add up to 2% to 6% of the mortgage amount when financing.
However, when it comes to selling, homeowners end up shelling out a decent amount of money again — up to 10% of the home’s value, according to haus.com. So on a $300,000 property, a seller can expect to spend up to $15,000 on real estate agent commissions and other selling costs. A portion of that will go towards preparing the home for market, including repairs and renovations.
But how important is it to address appliances when doing those repairs? Does it make sense to plunk down a good portion of money on items you won’t get to use? In some cases, and with the right strategy, sprucing up your appliances could work to your benefit.
New appliances can get expensive, fast
Purchasing appliances can come with a significant price tag. While the exact cost depends on many factors, including the type, size, brand and features, new appliances can range anywhere between $190 to $10,600. Most consumers spend between $320 to $4,030, or $2,175 on average, according to HomeAdvisor.
Homeowners who do update their home’s appliances when selling typically focus on the kitchen. And for good reason. An updated kitchen can increase a home’s wow factor and provide a decent return on investment (ROI). The National Association of Realtors (NAR) cites kitchen renovations and upgrades as the interior projects most likely to appeal to homebuyers and add to a home’s value in its most recent Remodeling Impact Report.
But updating a fridge, oven and dishwasher — all at once — can get pricey. As you consider where to focus your dollars, keep these tips in mind.
5 tips for using appliances to sell your house
If your appliances are broken, mismatched or so outdated they take away from the home’s appeal, it’s worth addressing them. But that doesn’t mean you have to update everything or spend a lot of money. Consider these strategies to leverage your home’s appliances when selling.
If the terms are right, opt for insurance.
Depending on the age and condition of your appliances, purchasing home appliance insurance could be a cost-effective alternative to replacing them. With the average cost of a basic policy running from $400 to $550 per year, you could insure your appliances for less than the cost of buying a new one. Keep in mind that home appliance insurance coverage varies, and policies may not cover the full repair or replacement cost. Before making this investment, consider carefully whether the coverage warrants the expense.
You’re not required to leave them.
It’s usually up to the seller which appliances they include in the transaction, except when the buyer’s lender requires specific items. With this in mind, you could stage the home with appliances you plan to take with you to your new property. You would need to make it very clear in the contract which appliances are a part of the sale. If you choose this path, consider that homebuyers expect the essentials — fridge, dishwasher, stove — to come with the home, although not required. Excluding them or swapping them with outdated items could impact your selling chances, especially in a buyer’s market.
You can leave them if the price is right.
Another approach is to upgrade the appliances that are outdated or mismatched but use them as leverage during the negotiations. If the homebuyer knows the shiny new fridge they saw during the showing will be replaced with a not-so-attractive older model, they may be willing to purchase it from you. Be sure to make it clear that buying a particular appliance is an option when drafting the purchase agreement. To determine a fair price, consider the appliance’s replacement cost if the buyer had to buy the same model. Then offer it at a price that’s a win-win for both of you.
Know when to go high vs. low
There’s no need to opt for professional-grade appliances if upgrading during selling — unless, of course, that’s the going trend in your market. Otherwise, having very high-end appliances may look out of place in a moderate home and could intimidate buyers looking for something mainstream. Additionally, you’re not likely to recoup what you’ve spent. If replacing your appliances, opt for decent quality items that are energy-efficient and relative to the home’s value. Consider shopping clearance sales or floor models to get the most bang for your buck.
Reface instead of replacing old appliances
An alternative to spending a lot of money on replacing appliances is to give them a face-lift. Two inexpensive ways to do that are replacing the panels of the appliances with stick-on panels or applying a coat of appliance paint. These fixes give the look and feel of updating your appliances without the price tag.