Another Seller’s Decision: How Much Fixing Up To Do?

(MOUNT OLIVE, N.J. ) Nov. 9, 2011 — As if deciding whether or not to list your house isn’t enough of a challenge these days, the decision brings with it a second question that we’re often asked: Should a seller fix up his or her home before selling it, or leave it as is?

It’s not an easy question to answer. It’s a decision to be made with the help of an experienced seller’s agent who knows your market well. That, perhaps, is just what you’d expect a Realtor to say, but here’s why it’s the right answer.

A few years back, agents told sellers not to put a lot of work into their homes before putting them on the market. It was a seller’s market and people paid top dollar for homes no matter what shape they were in. The market today, as you know, is much tougher.

These days, homebuyers want homes that are move-in ready. What’s more, studies show that when they see an area they regard as troublesome, they’re likely to overestimate what it would cost them to fix it themselves.

A  study done by Old Dominion University asked people to look at photos of a home and estimate its value. When those photos included a room painted in an ugly pink, the perceived value dropped $3,500. That’s obviously a lot more than it would cost to paint the room white, even if a few coats were required.

Other studies show that you probably won’t recover the amount you put into major renovations. The bigger problem, though, is that you’re in competition with homes that have been fixed up and staged. The decision not to invest in a make-over could leave you in the league of other homes that appear to be tire and, therefore, discounted.

The requirements to compete in a neighborhood of top-drawer, beautiful homes are different than what you need to do in a neighborhood of rental homes. Neighborhoods in this area cover the entire spectrum. Your agent can look at your home with an unbiased eye and knowledge of the competition.

Inexpensive cosmetic faults, repairs and maintenance items are a must. Improvements should, most likely, be avoided. A good rule of thumb is to always make major improvements and renovations for personal enjoyment, keeping resale in mind. Don’t do major improvement and renovations for the purpose of resale.

At the very least, you should plan on having your home decluttered and staged, all wallpaper removed and a fresh coat of paint applied – and builder’s white doesn’t cut it anymore. Your agent can offer other ideas.

Listing a home requires the counsel of an experienced – meaning successful – seller’s agent. You don’t need to make these decisions alone. You should speak with your financial advisor, accountant and your Realtor.

By the way, the rules for fixing up your home are a little different if you’ve decided to sell your home short, meaning your agent has convinced your bank to allow you to sell your home for less than you owe. It’s one way of avoiding a foreclosure. Short sales are the topic of a workshop to be held at 7 p.m. Nov. 14 at the Lamplighter Restaurant inChester. Attorney Martin D. Eagan and I will talk about short sales as an alternative to foreclosure. The workshop is free and open to the public.

 

 

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