Opportunity to make money on money spent #704

#704 in a series of true experiences in real estate

Often it is months ahead of time that an owner calls us to ask what he should do to get his house ready for sale. He’s trying to gear up to the task, hoping that it won’t be too ominous, wanting to know, of course, what price his house will sell for.

Whether he’s taken pride in maintaining his house all along or not, he talks first about “what is wrong with my house,” especially those things he never got around to doing but thinks should probably be done now.

“We will paint the outside trim and the front porch, but I think the rest of the exterior looks OK,” he says. “There is a spot in the dining room ceiling where the rain came in some years back. It hasn’t leaked since then.”

“We had the roof replaced but the ceiling looks bad, so we’ll fix that. We’ll have to deal with the accumulation of junk we have in the basement and the garage.”

“We never did remodel the kitchen,” he adds. “The dishwasher doesn’t work and the counters are worn. I always thought Mexican pavers would be nice on the floor.”

“But it doesn’t make sense to completely redo the kitchen now, or does it? Surely the buyers would prefer to do it their own way.”

We ask how long ago the roof was put on and if the gutters were replaced too. We look at the furnace and water heater and electric box to see if these are old or new.

Has the water heater been braced to current code? Are the furnace ducts asbestos covered? Are there circuit breakers?

“Is the basement wet in winter?” we ask “Has any earthquake retrofit been done?”

“How important do you think it is to have the wood floors refinished?” the owner asks. “They’re fairly worn but it will cost something to do them and there’s the mess to deal with.”

We’re still gathering information and thinking. We’re not ready to make recommendations yet, but we do say, “The blue rug looks good here and the wooden windows in this room are beautiful.”

“Yes, putting the large buffet in storage is a good idea because it takes up so much space. If you want to take that light fixture with you, it’s better to replace it before you put the house on the market.”

Sometimes we are made aware of special circumstances that will affect showing the house. Someone living in the house is sick and shouldn’t be disturbed. Or the owner runs a daycare center at home. Or there are large dogs in the yard.

The seller tells us his hoped-for plans. Where and when is his moving? Will he be living in the house during marketing? How does he feel about investing more money in the house?

Perhaps this house has a major problem that will be difficult or impossible to fix and will figure into the pricing and marketing of the house: a faulty foundation, major settlement that has caused sloping floors and cracked plaster, loud traffic noise.

Every house, every situation is different. Sometimes it makes sense to remodel, but often it does not. Some sellers are able to work on their houses, but not all. Some don’t have the money, the time, or the vision.

It’s usually a few days before we talk to the seller again. By then we have researched what else is for sale in the area and what has sold. We’ve talked to one another and, frequently, to other agents about what the house will sell for and what might be done to obtain the highest price.

We are now ready to discuss possible plans of action and let the seller decide what amount of time, money and spirit he can provide.

For example, we may say, “If you do nothing else to the house at all, we think it will sell for X. There will be, even in this very active market, fewer buyers for it than if you did some work, but it will still sell.”

“There’s no need to remodel the kitchen, although if you install a new dishwasher and countertop and paint, it will appeal to more buyers, and we think you can sell it for XX.”

“We’d like to know what it would cost to upgrade the electrical main even if you don’t do the work. If you do the upgrade and you also paint most of the interior, have the hardwood floors refinished and have the bathroom flooring redone, we think you can sell for XXX.”

There are so many variables effecting how much any house will sell for. Even today, with many buyers and relatively few houses for them to choose from, the underlying condition and cosmetics of a house can make a decided difference in selling price. While it is true that in this strong market the chances of selling a lesser house are good, it is still the case that buyers are willing to pay a premium for the best houses.

Location, condition, size and style of house, ease of access for showing and overall marketing continue to effect the sales price in this market, just as they have in slower markets. In fact, sellers today may never have a better opportunity to make money on money spent on their houses.


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