You're ready to list your home for sale...then you look around. Maybe you've spent time and money updating the exterior of the house but the interior is still in serious need of attention. Maybe there's dry rot, or maybe it's just outdated.
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.
Give me a call before deciding on making any repairs to discuss the pros and cons with your particular home and your personal situation.
Let's say your home needs a lot of work. It has holes in the walls, damaged kitchen cabinets and wood floors. Much of the electrical system doesn't work and all the faucets leak. Backyard landscaping is all dead and the fence needs some serious repair.
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.
Some homebuyers say they want to buy fixer-upper homes but they're generally looking for those that require only light cosmetic repairs. Buyers who gravitate toward fixer-uppers are those who either don't qualify to buy a more expensive home or want to make a profit by fixing up the home themselves.
Most "fixer" buyers are willing to do simple repairs such as paint the walls, put in new carpeting, or replace light fixtures. They don't want to rebuild a foundation or move walls.
Fixer-upper buyers will discount the price of the home to allow for the repairs, then discount it a bit more for the inconvenience. Say a home is worth $700,000 fixed up, but it needs a new roof and new flooring. If all repairs are expected to cost $30,000, a buyer most likely will not offer $670,000 for this home. They could buy an identical home with a new roof and flooring for $700,000 and not have the hassle.
A buyer for this type of home might offer $650,000 or even less. It would be smarter for the seller to pay for a new roof and replace the flooring and sell the home for $700,000 in this scenario.
And 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.
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 lift the roof and install skylights in the master suite, realize that kitchens and baths carry the highest return.
You might also want to give me a call and take an afternoon off to tour other homes for sale in your neighborhood with me. 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.
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 HVAC systems. Repair leaky faucets.
Replace cracked 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, and battered furniture can detract from your home's appeal. I offer complimentary professional home staging as part of my full-service listing. That will make such a huge difference.
If the 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. I have my thumb on the market pulse, so don't hesitate to ask for advice.
San Diego is expected to remain a hot market in 2020, thanks to a strong economy, low unemployment and mortgage interest rates. We will continue to see the same shortage of inventory during the course of the year and modest home price gains.