Invest in improving your home for a quick sale and high return
It is not realistic to place a home on the market as is and expect a quick sale for top dollar. The work that is needed translates into investing money to make money. Anyone can overspend to prepare a property, the challenge is figuring out how much you need to spend to do it right.
If you own an updated home, you can anticipate spending three percent to five percent of the listing price to take it from “how you live” to “how you sell.” Under the very best circumstances, you should still estimate investing one percent to three percent of listing price. This includes, for example, materials, labor, storage and professional guidance to get the job done properly.
Keep in mind that neither of those estimates include maintenance. Deferred maintenance is not the buyer’s problem. Prepare to take a loss if you do not address maintenance and repairs.
If you need to improve the property for sale, you have two choices. You can invest wisely to get a good return on investment or reduce the price of the house to accommodate the necessary changes. The latter has an additional risk; since it is less attractive to buyers, the house could sit on the market unnoticed despite a lower price point.
Potential buyers may not be able to envision how to tackle the job(s), do not have the time or energy to take on the project(s), or are concerned that the investment to update will price them out of their budget or out of the neighborhood. All roads lead to further price reductions. These homes are prime candidates for investors who will eagerly buy them at a deflated value, do the work and flip them to gain maximum dollar per square foot.
Consider improving the property, even in part. This will cost more, but done properly, offers a better likelihood of encouraging a higher sales price and less time on the market. You can save money if you are willing to do the work yourself. Realize that you need to complete your DIY projects, including painting, at a professional level or risk defeating your purpose by receiving reduced bids.
There is credibility in the old saying, “you need to spend money to make money.” Preparing a house for sale offers the opportunity to get a great and fast return on your investment.
© 2016, Mindy Abramson, CSP, all rights reserved