How do you know when to upgrade your home in preparing to sell it and how do you determine what will get you your best return on investment?
That is a great question and one that many clients have asked me in the past. A client of mine recently sent me an email asking the same questions. His home was in need of some major repairs and he was unsure the best approach with the goal of selling his home within the next 3 months. This was my response to him via email. He liked it so much that I decided to add it to my blog. I hope this helps you too, take care and good luck!
“I like to think of it as what will make your house more “sellable.” Many times I don’t think someone will get a dollar for dollar return on improvements so I usually recommend a less is more approach. Every property is different and recommendations would be based on factors such as the local comparables, amount owed on mortgage, what is the reason for selling, is there a sense of urgency, what fits in your budget, etc…so the easiest way to start is have a good realtor take a look and give you recommendations!
Often times simple upgrades such as a fresh coat of paint, cleaning carpets, clean landscaping/yard, replacing outlets/switches with plates, or adding new hardware to cabinetry and doors to give a little more of the updated look is better than pouring a bunch of money in high cost items. Also sprucing up a small bathroom can make a difference if you figure the cost of paint, 1 toilet and a small vanity is pretty reasonable if you can do that yourself.
Take care and repair anything that may interfere with financing such as a broken window, exposed wiring, chipped paint, along with anything serious that needs immediate attention, such as an active roof leak. Usually a little hard work and time in making what you have already more presentable will go a long ways. These are usually affordable options. It is also wise to consider what is attractive about your home and then try to accentuate that. So if your home has an awesome yard and setting with a large back deck and patio that is great for entertaining then spend a bit of extra time to spruce that up a little more.
A situation when it may be wise to consider spending some serious money for major items is if your home is located in the type of neighborhood that demands a higher price tag, based on recent sales, than what your home is worth. If you live in a $225,000 neighborhood and your home could sell “as is” for $175, then it may be worth exploring whether adding $25k in necessary repairs/upgrades will be returned with a sales price closer to the neighborhood average. However if you your “as is” price was around $25,000 less than the neighborhood supports, then there is no point, just price your home where it should be and then you will save yourself time and money now and in the future. If the latter option is the route that you choose to take then the best approach is clean, clean, clean and take care of the simple things that I mentioned above. Another helpful idea is to offer a buyer a 2 yr home warranty to add incentive in this situation too….that’d be you pretty much saying, “I know our roof, furnace, etc..is old but with this 2 year warranty you as the buyer are covered for 2 years if anything breaks!” The warranty usually costs about $500 and would cover most mechanical/structural components of the property.
In a nutshell, often times big ticket items will not provide a dollar for dollar return on investment but it will make your home more sellable, unless your neighborhood can bring up your value. The little things are great at making it more sellable too and much more affordable. I guess the question to ask yourself is what your motivation to move is and how much money is it worth spending to move on and do you have that extra money?”
If you want advice on preparing, staging, upgrades to think about when getting your home ready to sell then please call me at (616) 780-5314 or send a message anytime and I will be happy to help.
Dave Kiel , Licensed Realtor