What not to settle when selling a house

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Preparing to sell a home can be daunting. Popular shows like “Fixer Upper,” “Flip or Flop,” and “Property Brothers” make it seem like you have to spend thousands of dollars and make remodeling a full-time job to get ready to put your house on the market. Marlet. While real estate flippers often make money renovating and reselling homes, these people are professionals who have spent decades developing their own skills, knowledge base, and network to be successful.

The average homeowner who is preparing to put their home on the market won’t see a huge return on investment (ROI) for many of the larger home renovations, like kitchen renovations. Even the most popular fixes, like repainting your interior and exterior, only offer a 51% ROI according to an analysis by benchmark real estate agent company Homelight. For neutral-colored homes in good condition, repainting is even less cost-effective. Our conventional wisdom about what needs fixing is often skewed in favor of spending more money and time than necessary.

Key points to remember

  • Cleaning, decluttering and increasing your curb appeal should be done before each sale
  • Costly repairs and renovations should be avoided
  • Think about return on investment (ROI) before making any repairs
  • Keep updates of your home in line with your neighborhood and comparable homes. Don’t install Italian marble when everyone has linoleum.

Consult a real estate agent before making any repairs

Whatever your market, there are several things everyone should be doing to get a quick sale. You need to make sure that your home is clean, decluttering, staged to some extent, with the greatest curb appeal you can manage.

A local, experienced real estate agent should know the market conditions in your area and have a good idea of ​​what repairs are needed to get your home to match comparable sales at the desired price.

Ask your agent for a Comparative Market Analysis (CMA) to see what other homes are selling for. If everything on your CMA at the desired selling price is in similar condition to yours, you may not need to perform any repairs before signing up. If everything on your CMA is much more up to date, do some estimates to see the cost in money and how long it would take you to get your home to the selling price you need. Often the cost of updates will not be recouped during the sale.

Take your agent’s suggestions on repairs with a grain of salt. Real estate agents earn commissions based on the sale price of your home. If multiple upgrades cost you $ 200,000 and increase the sale price by $ 100,000, that’s a bad investment for you, but a big increase in commission for your real estate agent. Make sure you are working with an agent who has your best interests in mind.

Don’t do major renovations

While many expensive upgrades can increase the overall selling price of the home, depending on the project, homeowners can also recoup a high percentage of the value of the increased selling price, according to the National Association of Realtors (NAR). .

In the table below, using estimates from the 2019 Remodeling Impact Survey, the most recent year available due to COVID, renovators have estimated the cost of some projects and real estate agents have estimated the cost recovered from the sale price of the house.

Return on investment of major renovations
Type of renovation Estimated cost of the project Estimated cost recovered % of recovered value
Kitchen renovation $ 68,000 $ 40,000 59%
Bathroom renovation $ 35,000 $ 20,000 57%
Adding a bathroom $ 60,000 $ 30,000 50%
New Master Suite $ 150,000 $ 75,000 50%
Most large home improvements just don’t recoup their cost. If you’re dying to renovate your bathroom, do it early so you can enjoy your renovation. It won’t be financially worth doing this right before you sell. (From the National Association of Real Estate Agents.)

Don’t start a task you can’t complete

Home repairs are often more expensive, take longer, and require more skill than most people realize. With supply chain issues and a tight job market due to the coronavirus pandemic, it’s harder than ever to complete a home improvement project on time and under budget.

The Federal Reserve Bank has been tracking lead time data for the manufacturing sector in New York City, Texas and Philadelphia and has seen a 300% increase in some areas over pre-pandemic lead times. This means you don’t just wait for your home appliances to arrive at your local store from the warehouse, then wait for an installer, you also wait 300% longer for the materials to even arrive at the manufacturer to make your appliance. .

This means you don’t have to go into the demolition phase of a repair or upgrade until the items and tools you need to complete your project are physically in your home. It’s better to keep the 1970s high pile carpet than to tear it up and expose the stained floorboards, because the 2,000 square feet of hardwood you ordered six months ago still haven’t been produced or are on a ship outside the Port of Los Angeles. .

Do not correct and replace with trends

Replacement of broken or damaged items such as light fixtures, faucets, cabinet hardware, etc. can quickly change the look of a home and help it sell quickly or even value more. Repainting a room, door, trim, or cabinetry can also provide a quick facelift. However, make sure you don’t substitute anything for something overly obnoxious or trendy.

What is currently fashionable for a specific segment of the population can be extremely off-putting to others. Keep your potential buyer population as large as possible by choosing neutral colors and common lighting styles that everyone can enjoy.

Do I have to sell my house for cash?

While this is more convenient, typically when you sell your house for cash you take an offer from a buyer who subtracts all repair costs and then offers 75% of what they expect to sell the house for. Doing the housework, decluttering, and repairs that you have the time and money to accomplish while putting your home on the market will likely net you more money than selling for cash.

What do I need to correct at the bare minimum?

If you are able to, you should fix anything that is a significant safety issue and would cause your home inspection to fail. Any major leaks, infestations, sewer problems, or electrical hazards should be repaired before you put your home on the market, unless you intend to sell for cash.

Should I stage my house?

Yes. Staging a home can get your home to sell faster and more expensive. However, directing does not necessarily mean hiring a professional directing service. Cleaning and decluttering is part of the staging and needs to be completed for the move anyway, so do it before the ad photos are taken to have the biggest positive impact on your sale.

The bottom line

You may not need to fix anything to get your home to market. The most important thing is to make sure that you clean, declutter, and increase the curb appeal of your home. Talk to a real estate agent to get a feel for what is needed in your current market. Perform some basic calculations on your repair costs. During the current supply chain crisis, make sure you don’t start anything that you can’t finish until your ad goes live, and if you’re upgrading right before you sell, do it right. neutral tastes rather than your own.

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