“Will I make more from the sale of my house if I do some renovations first?”
That’s a question we hear a lot.
You’ve done your homework and found that many homes for sale have glamorous granite counters, new hardwood floors, spa-style baths, French doors, and other exciting features. Should you spend the money to make those improvements in order to make your home more marketable?
It is true that fancy-schmancy kitchens and lavish master bathrooms hold great appeal for buyers and often mean a quicker sale, but in the long run most homeowners who plan to sell immediately will probably not recoup their renovation dollars. For most, the real return on investment for major renovations is the actual enjoyment of living in the updated home. The likelihood that the home will sell sooner when you do need to move — you made it more desirable to future buyers — is a nice bonus.
In other words, if you spend $50k to put a gourmet kitchen into your older ranch just before you put it on the market, you are probably not going to increase your selling price by the full $50k.
Some experienced real estate investors specialize in buying distressed homes, doing a swift renovation and reselling at a profit. Such people are typically either contractors who can do the work themselves, or because they buy and sell in volume, they have access to skilled labor and materials that the average homeowner does not. They know what to look for when they make an offer for a property they will rehab. To put it another way, they know how to avoid the “money pit.”
But for the average homeowner who wants to sell, how much should you spend, and on what?
If your budget for getting the house ready for market is zero to the low hundreds, spend it on cleaning supplies and/or hire a professional if you’re not up to the job.
Kitchen sink, counters, cabinets and floor should be spotless. Bathrooms should sparkle and smell fresh. Soiled carpets need a visit from the Rug Doctor, or maybe even professional cleaning. Living areas and bedrooms should be free of clutter and family photos. Box up the excess stuff and store it in the garage.
Pretend you’re a buyer and park in front of the house, walk up to the front door and really look as though you’re seeing it for the first time. Get rid of the old pot of dead chrysanthemums on the front porch and the toys in the front yard. Clean spider webs, wasp nests and other debris from the area around the front door. Don’t forget to actually clean the door and sweep the front porch!
You get the idea.
If you can stretch your budget a bit further, you should also do all the repairs you’ve been putting off. Half of the homes we see have wood rot somewhere, often on the fascia boards at the roof corners or on the wood trim on the side of the home. Get the rotted wood replaced and painted. If you’ve had past roof leaks repaired, but didn’t bother with the damage or staining to the ceiling inside, get it fixed and painted.
If the exterior paint is peeling or chipped, having it repainted is a must. Get plumbing leaks fixed, and make sure your windows and doors all operate properly. Replace broken window panes and have torn screens replaced. Maybe replace, or at least paint, the front door if it is in bad shape.
Buyers are looking for what might be wrong with the house, and when they see several minor problems they sometimes assume there are bigger issues that they can’t see, and then bye, bye buyer.
Here’s the thing. Spending some money on repairs is really a “two for the price of one” deal. Not only is a well-maintained home more likely to get an acceptable offer from a buyer, it can also make the difference in whether or not you get to the closing table once you are under contract. That’s because a lot — and we mean a larger percentage than you might think — of today’s home buyers are buying with FHA loans, which allows a much lower down payment and is more forgiving of past credit issues. But the property must past FHA guidelines. Chipped or peeling paint on the home’s exterior and broken window panes are just two examples of issues that will prevent your buyer’s loan from getting FHA approval. Getting your house in top shape prior to listing makes good financial sense in many ways.
At the end of the day, your best bet is to hire an experienced and professional REALTOR®, and ask for help determining the right price for your house and suggestions on how you can best make it ready for showing and selling. If you tell him or her your budget for repairs they should be more than happy to help you formulate a plan.
We sure would 🙂
Call or email us today…Debra at 727-286-1249 or John at 727-642-6864.Google+