Why Do I Need to Fix Up My House to Sell?
I get asked this question all the time and the answer is that you don’t HAVE to! You could walk out the door and sell your house just as it is now without lifting a finger. This is the easiest thing to do. The problem is, even in this Seller’s market, the buyers will base their offer price on what they see when they first walk in the door. If they see weeds in the yard, threadbare carpets and faded paint around where you removed your paintings, they will typically offer a lower price than they would have had they seen a sparkling clean, freshly painted and staged house.
Q: My house will probably get torn down by the new Buyer, why should I spend any money fixing up something that is just going to be demolished?
A: The permitting and contractor selection process can take 1-2 years, sometimes longer and a Buyer might want to rent out your house (or live there) while they are getting their plans ready.
Q: How do I know what I should do to prepare my house for sale?
A: Rely on your Agent to advise you. They will explain the sorts of things that will give you the biggest bang for your buck. You should also go look at other open houses in your price range and see what they look like. Pretend you are buyer...have a critical eye...which house would YOU want to buy?
Q: What sorts of projects should I consider?
A: Usually cosmetic fixes have the highest return. Typically, you don’t need to do anything structural like taking down walls or adding a bathroom as you never know what the new Buyer will want.
A: Painting is usually #1. Full interior is most common and sometimes just painting the exterior trim will do the trick. Replacing old or dirty carpets or dated linoleum is high on the list. Staging shows buyers what their house MIGHT look like. For the exterior, simply giving everything a big “haircut”, trimming trees/bushes blocking windows, adding a fresh layer of mulch, etc. go a long way to increasing your curb appeal.
Q: How much does it cost?
A: Of course it all depends on what you do but usually it’s in the $30-$100K range.
Q: That’s a lot of money! Is it worth it?
A: Yes! I find that simple cosmetic fixes will return 2-3-4 times the cost. If you can’t at least double your investment, it might not be worth it. The ultimate goal is to make your home appeal to the widest buyer pool out there. If we can create essentially a "blank canvas" for the buyers to "paint their life on top of", then you will very likely be able to garnish a higher sales price.
Q: Who pays for it?
A: The Seller. Talk to your agent though as there are sometimes programs that will allow you to borrow the money for fix up that will be repaid when you sell your house. Remember too that typically monies you expend to prepare your house for sale will reduce potential capital gains taxes: be sure to ask your Tax Professional first.
Q: That all seems like a lot of time, effort and money. Is it REALLY worth it?
A: In general yes, but your agent will advise you on YOUR house. Their job is to get you the highest possible net price.
Thanks to Owen Halliday, DRE01453658 for help with the article.