Figure Out What Improvements “Pay Off”
Deciding whether to make improvements or “sell as-is” is a big question to owners looking to sell their property. Whether or not you should make improvements depends on a few things. Do you have the funding to make repairs? Do you have time to monitor the property while contractors are working? Do you know what repairs will pay off and which won’t?
Should you spend more time and money on fixing it up or just try to sell it as is?
This is one of those questions where the answer depends on variables. What’s the condition of competing homes for sale? Is it a hot, cold, or neutral real estate market? What’s the likelihood of a return on your investment?
Many sellers put way too much money into fixing up their homes before listing them for sale. They repair flaws that a buyer might never notice or just won’t pay extra for. Talk to your agent before making any repairs to weigh the pros and cons with your particular home and your personal situation.
Selling a Home in “As Is” Condition
Let’s say the property in question needs a lot of work. It has holes in the walls all the way or soaked wood floors. Much of the electrical system doesn’t work and the bathroom tub has fallen through the joists. All the faucets leak.
This is not a home that can be easily or economically fixed. A coat of paint won’t help. In this case, you might want to just price the house low enough to attract multiple offers. You can probably anticipate that only contractors and flippers will make offers.
Keep in mind that many buyers will not buy a home that needs a new roof. They worry the work involved will cost more than what they anticipate. Perhaps replacing the roof would involve tearing off the sheathing and repairing rafters, which could add to the cost. Most buyers want a home that’s in move-in condition. You can limit the number of buyers who might be attracted to your home by not making repairs.
Before Fixing Up Your Home
Smart sellers will weigh the cost of the proposed improvements against the home’s market value after the repairs or upgrades are completed. Such an improvement might not be warranted if an upgrade won’t return the investment. Before you decide to install skylights in the master suite, realize that kitchens and baths carry the highest return. You might also want to take an afternoon off to tour other homes in the neighborhood of sale with your agent. Note the condition and amenities in these homes.
Compare homes in the neighborhood to yours. If most of them have upgraded kitchens, you should concentrate on fixing the kitchen. These homes are your competition. This doesn’t mean you have to buy designer appliances and tear out the cabinets, but a minor kitchen remodel might be a good investment. Sometimes simply painting oak cabinets a darker color and installing updated hardware can give your kitchen an all-new look.
Where to Start
Make a list of everything that’s defective, broken, or worn out. Buyers might wonder what else in the home has been neglected if they spot problems or malfunctioning systems as they tour your home.
Minimum improvements to consider making before selling your home include patching holes and cracks in the walls and ceilings, and fixing broken appliances and AirCon systems. Repair leaky faucets.
Replace broken window glass and repair the roof if necessary. Change any dated light fixtures or ceiling fans. Fix code violations—any serious buyer will have the home inspected.
Replace worn or stained carpeting. Repaint dark or marred walls with neutral paint—not white. Replace old drapes and window coverings. Keep in mind that empty homes don’t show as well as furnished rooms, but battered furniture can detract from your home’s appeal. Consider upgrading your furniture if it’s in bad shape. You can always take it with you when you go.
The Effect of the Market
If your real estate market is extremely hot—it’s a seller’s market—you can usually get away with fewer fix-ups before selling. But a home that needs repairs will still deliver a lower price in any market. Buyers might not even bother to look at a home that needs work in slow markets. Your agent has their thumb on the market pulse, so ask for advice.