REAL ESTATE MARKET ANALYSIS

SHOULD YOU UPDATE YOUR HOME PRIOR TO SELLING?

The national average is that you will only get back 95 cents for every dollar spent on upgrading your kitchen when selling. And, you will receive only 85 cents for every dollar spent on upgrading your bathroom. Only issues such as cleaning, painting, repair, and landscaping provide a great return on investment. Therefore, as a general rule, you spend the money to upgrade primarily for your own enjoyment.

Investors that 'fix & turn' homes, make the majority of their money on the front end by buying homes well below market value. The upgrades they do make the homes more salable by attracting home buyers that don't have the cash to do it themselves or are willing to pay for the convenience to avoid the stress and mess. But most of the profit comes from their purchase, not the upgrades.

Those rules apply in a seller's market. However, in a balanced or buyer's market, CERTAIN HOME IMPROVEMENTS CAN MAKE THE DIFFERENCE IN WHETHER YOUR HOME SELLS OR NOT. Adding a third bedroom is important. Adding a second bathroom adds value. Building a garage can make a difference. Fixing a worn roof is critical due to lending and insurance requirements. And... there are other important improvements to consider to help you attract buyers.

You need to know what you're doing. Your tastes in materials, amenities, etc. may not offer value to other people. Certain items in today's market attract buyers, such as real hardwood floors (not laminate), stainless refrigerators, gas ranges, front loading high efficiency washer & dryer, automated sprinklers, solid granite counters (not granite tiles). On the other hand, swimming pools, cheap construction, dysfunctional floor plans, structural problems, curb appeal problems, and items in disrepair repel buyers.

The home features & improvements you need today are neighborhood specific and are based upon the buyer demand, the competition of other sellers, the price range and likely buyer types, along with other factors unique to your particular micro-real estate market.

The other important issue to consider is the time it will take to do the upgrades. The benefits of upgrading need to be weighed against the costs of delaying the sale of your home. Rising interest rates and a declining market can cost you more by delaying than the benefits of getting the upgrades right.

Other timing factors to consider when contemplating an update are 1) The competition increases dramatically in the spring and summer as more of your neighbors put their home on the market. 2) How long your home may require on the market to get sold. 3) If you must make an additional mortgage payment on a vacant home.

The bottom line is that the answer to whether to update before selling is complex and unique to every property. I will be happy to provide you with a free consultation and lend my professional expertise to do an analysis as to what is best for your financial interests in meeting your special needs. Call me today!