Properly Walking a Property with a Buyer

Services for Real Estate Pros with Realty Pilot BR538801000

As a broker and engineer, I tend to walk a property quite differently than most agents. One of my key focal points to understanding how well a property will be a match for a buyer is the knowledge of quality of workmanship and general cost to repair. If you can walk into a property, identify major upgrades and know the value or cost to repair, this helps with establishing value with the buyer. Essentially the value of upgrades or cost to repair can be a basis to determining a good baseline for an offer. It can also provide a way to eliminate or include a property on the buyer's desired list. The image posted shows an empty pool. Just from this photo there are many questions to be answered such as, how far away is the pool equipment in case all underground piping may need to be replaced, what is the cost to re-plaster or apply Pebble Tec, what is the total cost to replace the above ground pool equipment assembly, etc. Also from this photo the roof may look to be within 10yrs but the closer you look at the eaves, they show severe dry rot that leads to believe the roof may be more than 15yrs old.  Repairing eaves is easy knowing that caulking and paint will make it look new but roofs are a different beast. Roofs can range in costs based on the type of shingle or tile, rating of the underlay paper and number of layers used and whether or not heavy equipment such as an AC unit will have to be moved to install. One other item that can be seen are the windows. The windows are single pane and will have to be replaced at some point to improve the efficiency of conditioned air. Windows can differ in costs from a Flash-Fin to a full removal and replacement. The difference is 2x between the two types.

The main point is to understand the costs and be able to discuss a general number with a buyer so that they know what value the upgrades bring to the value of the home or what it will take to improve the property to meet current property value. If you know the general price per square foot of a property in a specific location for a remodeled home, this will allow you to reverse engineer the value to determine if a property you are showing is priced within your buyer's budget. Knowledge is power and if you are new or have wondered how to understand values better, get to know general a contractor and ask them questions about costs for painting (interior/exterior), flooring, roofing, kitchen remodel, bathroom remodel, windows, pool equipment, stucco, landscape pavers, auto watering systems, water softeners, AC units, overall new construction building and anything you generally come across. These costs differ in different parts of the country and using a cheat sheet is always good to have with you. Also a good calculator app goes a long way if you are not great at counting in your head. 

Additionally, inflation has changed the way we sell homes and staying up with numbers of remodel costs can make a difference in good margins to no profit at all. Today the cost to remodel returns 1 to 1 value of what is costs to remodel verses what a property can sell for. So the bottom line, know your numbers to help your clients make the best decision they can and always mention to seek professional opinion and not solely rely on your numbers for final decision.  

Comments (6)

Jeff Masich-Scottsdale AZ Associate Broker,MBA,GRI
HomeSmart Real Estate - Scottsdale, AZ
Arizona Homes and Land Group/ Buy or Sell

I just sold a 50 acre horse property and home in Show Low Arizona, an with the small mountain and ravines on the property it was a hike. 

Nov 11, 2022 09:53 AM
Dan Hopper
Dan Hopper - Gold Way RE - Westminster, CO
Denver Broker / Real Estate Advocate

It is a great to have a set of skills and knowledge to bring value to your clients.  I believe that all professionals that have licenses, certifications, and degrees, should disclose to the clients.  

Nov 11, 2022 10:16 AM
Richard Weeks
Dallas, TX
REALTOR®, Broker

Great information, thanks for sharing.  I hope you have a great day.

Nov 12, 2022 02:49 AM
Grant Schneider
Performance Development Strategies - Armonk, NY
Your Coach Helping You Create Successful Outcomes

You are a great help to buyers.  Most Realtors don't possess this much technical knowledge.

Nov 12, 2022 05:26 AM
Mary Hutchison, SRES, ABR
Better Homes and Gardens Real Estate-Kansas City Homes - Kansas City, MO
Experienced Agent in Kansas City Metro area

Never really thought about how far away a pool is located from the main house--that's a good point about the underground pipes!  

Nov 15, 2022 08:28 AM
Steffy Hristova
HomeSmart Elite Group Tempe AZ Tel: 602.710.8161 - Tempe, AZ
Tempe AZ Realtor - Your Home Close to Your Work!

Great information to share with Buyers, as well as with sellers, when pricing the home. I am sure your clients appreciate and benefit well from the depth of your technical knowledge. I will re-blog your post.

Nov 16, 2022 07:24 AM