Note: This is the next post in my series the ABCs of Buying, Selling and Investing in Real Estate. Each post I select a letter, like J this post, and write up a fictional story about it. I give some very real advice in the story. The story is fake, but the advice is real(ty).
This post continues the story started in Three Justifications for Sellers that are Getting a Home Inspection.
Jesse was having a major disagreement with his father about whether a home inspection was needed before putting a house on the market. I sided with Jesse’s father and we discussed three good justifications for getting an inspection. Jesse came back to me two days later with some further questions. We met at the local coffee shop and discussed his concerns. Jesse was living in a home that his father had given to him while in school so the monthly payment would be a good investment versus a monthly rent being thrown away. Jesse had been discussing (arguing) with his father from the time Jesse told him he wanted to sell the property. The latest argument was what to do to the house to get it ready to sell. Jesse wanted to keep the budget low and do only minimal things. His dad had a different opinion saying that you had to do some juicy things to a property to pull in buyers. Jesse wanted to know who was right. He understood his dad’s reasoning, but just felt strongly that buyers will over look the lack of juicy upgrades and updates if they house was priced right.
This is what I told Jesse…
I was happy to tell him that both his dad and him were correct in some ways, but wrong in other ways. I told Jesse the most important thing to remember about selling a house is that presentation matters when trying to sell. If the presentation is lacking, you will have fewer buyers interested in making the purchase. If you presentation is stellar, you can expect buyers to line up to have look at what you are selling. When selling their homes, sellers need to realize that if they expect to get top dollar for a house, then they have to have some juicy items in order to make the property so attractive, buyers are willing to bring out the big bucks. I told Jesse that I think both his dad was right in this regard, but I also told him that he was right in wanting to keep the budget from getting out of hand. In other words, you want to get back in the sale of the house what you put into the rehab and updates. For example, you don’t want to spend a ton of money into the utility room as most buyers will not buy a home based on that one room. On the flip side, there are some projects you can undertake that will bring back a lot in return. If you want to explore what projects will bring you the most return, check out this site where they generate a report annually on this very topic. As far as juicy items that Jesse could do to get more buyers interested, here are the three I told him.
New Floors (or at least clean them very well) – The first item, that can be done with a various level of budgets, is making sure the floors shine. Buyers will notice right away if the flooring in the property is off or dirty. I have seen very nasty flooring in my time. Floors come in all types and price ranges. If you have carpet that is ripped in places or stained beyond repair, you probably need to spend the funds necessary to replace it. Hardwood flooring of any sort should be perfect aligned and look good in all sort of lightning. I don’t recommend putting the same flooring throughout the house as buyers like variety in all things. The combo that I see most often, and seems to get the biggest reaction from buyers, is carpet in the sleeping/play areas with hard flooring in the rest of the house. Tile in the bathrooms work really well for most buyers. Kitchens also have some form of tile although I have seen a few with hard wood flooring that worked very well with the rest of the decor. I also recommend you don’t install the flooring yourself unless you have experience and know what you are doing. Bad installation of flooring put off buyers very quickly. If you don’t have funds to replace flooring, at least have a company come into the home for a deep cleaning.
Paint everything – The next juicy item is making sure to put a fresh coat of paint on everything that needs it. This includes the outside as well as the inside. With the outside, shutters that have been weathered should be painted, Wood trim that has cracked or has paint peeling from it should also receive a fresh coat of paint. Painting inside the home is also important as it is amazing how a fresh coat of paint will change the whole dynamics of a room. If the paint is stained, or dirty, it will take away from the room even if everything else in it is perfect. When selling their home, I told Jesse that sellers should be cautious on using bright colors or strange colors that don’t fit the rest of the decor. Buyers know mentally that room colors can be changed easily, but why make the buyers work at visualizing the room when you can present it perfectly for them from beginning. As with floors, don’t do the work yourself unless you know how to do it. Sloppy painting is a waste of your time and money and won’t add anything to getting your home sold.
- Bathrooms and Kitchens – The final juicy item is which rooms need to be redone. As a realtor, I personally like to see all the rooms get something done to them as it adds to the over all presentation of the home and means it will bring a higher price. However, if I had to pick two rooms that always seem to get the most reaction from buyers, it is the kitchen and the bathrooms. If sellers can afford it, they need to put in granite counter tops. These counter tops make a good home great in the eyes of many buyers. One investor I work with refuses to even look at homes unless their is granite, or some other high end surface, because he knows it will lease higher with these items. Bathrooms need to be updated with new fixtures (matching in the kitchen) and upgrade the shower and bathtubs. If you don’t have a large rehab budget, you can at least switch out the old sinks and toilets to give the bathrooms a fresher look.
Jesse nodded throughout my lecture on what I thought needed to be done to a house to sell. He questioned whether “juicy” is really the right word to describe the items I mentioned (which I acknowledged with a chuckle) but he understood the need for them. He said he would look into replacing some of the flooring in his house, but felt most of it could stay in place, just needs a good clean. Painting is something he wasn’t sure about so would need to shop around to see what it would cost him. Finally, he knew that he would need to do some major upgrading to his bathrooms and kitchen if he wanted to get top dollar.