The highest possible sale price can be achieved by making needed updates and repairs to a home before it’s placed on the market.
There was a story once, told by another agent, of a home that was structurally sound being on the market, but it needed significant cosmetic work, like paint, floorcovering, updated fixtures, and lots of yard work. The house was vacant with the owner having moved out of town.
That agent had explained to the prospective buyer what she thought it was going to take to bring the home up-to-date and what it might be worth after those updates were completed. The buyer was from out of town and was going to be teaching at the university the next semester. He returned home without buying and came back to look again two months later.
As they looked at homes together, the previous home they had viewed together came up as a question. The agent told the prospective buyer that she herself had purchased it and did all the things she had suggested. The buyer asked if he could look at it. On seeing the property, now, in its pristine condition, the buyer asked the agent if she would sell the home to him at a profit.
The agent told him that it wasn’t for sale but followed up to the buyer with a question of her own. “I told you that you could buy it for below market and gave you an estimate of what it would take to update it which would have you in the home below market value and with all the colors and choices of your own. Why didn’t you buy it then?
The answer? The buyer admitted that it seemed to be a lot of work and that he just didn’t feel up to the challenge. In other words, he simply couldn’t see the finished and final project.
This isn’t a story you’re going to find in a book – this is actually something that, as a realtor, we see quite frequently. Buyers are normally not experienced enough to recognize what needs to be done, how much it’s going to cost, and how long the process and repairs are going to take. In most cases, they don’t have those important connections with different service providers. And, you guessed it, in some cases, they can’t quite envision what the property will look like after those renovations are made.
Some buyers do look for those “do-it-yourself” opportunities where they can earn sweat equity by purchasing below market and making those necessary repairs to add value to their home. But many more buyers don’t know how and/or may not want to get involved with all that hassle, and will pay a higher price for a home they can simply move into.
The highest prices being paid for homes are the ones in the best condition with the best locations.
A popular TV show called “Fixer Upper” uses this situation for the premise of each of their shows. People want to buy a home in great condition but can’t find what they want. Chip and Joanna find a good home in a good neighborhood for them and sell the vision of what it could be. The unique aspect of the show is that they act as agents, designers, and contractors to meet the buyers’ budget.
In the case of Fixer Upper, the buyer is the beneficiary of the increased equity for having taken the risk to make the repairs. For the seller to be the beneficiary, they need to do the updating and repairs before marketing the home.
This is a great time to ask your agent if they can provide suggestions of what items would most benefit from remodeling and if they have service providers that they can recommend. The proceeds from the sale of your home belongs to you and to maximize them, it needs to sell for the highest possible price. Your agent can work with you to make that happen.
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