Selling a home: improvements to get top dollar
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In a hot market, you may be able to stick a sign in your yard and unload your house “as is.” Otherwise, selling a home like that could be costly. Here’s how to get top dollar when selling a home:
- Fix the obvious: deferred maintenance or repairs make buyers wonder what is wrong that they can’t see
- Some fixes are relatively inexpensive but make your home look fresh and appealing
- You may have to renovate to compete with other nearby listings or correct exceptional ugliness
Even an improvement that doesn’t pay back more than it cost can be valuable if it cuts down your selling time.Verify your new rate (Oct 20th, 2020)
First, remodel your mind
We get emotionally attached to our homes. They’re havens in a harsh world. They’re expressions of our personalities. They’re sources of our status and places precious memories are made.
Or, rather, they were. The moment you decide to sell your home, you need to throw all that emotional stuff out the window. You’re now looking at a product that you want to sell quickly and for the best possible price.
You’re no longer a proud homeowner. You’re a hard-nosed marketing manager. And, just like a marketing manager, you’re all about the numbers.
Of course, marketing managers work hard to improve their products before taking them to market. But they do so only to improve their bottom lines. Any improvement that costs more to implement than it will deliver in profit is verboten.
That’s a rule you must apply to home improvements you make when you’re preparing to sell. After all, you won’t be the one who gets to enjoy living with the results of your spending. So you must be sure every dollar you spend either increases the sales price or shortens the time it takes you to sell.
Major projects rarely make economic sense
We all know about flipping. People make money from buying rundown homes, fixing them up and immediately selling them on for a profit. Especially in hot markets, flippers can make a good living doing that.
But they’re not you. Chances are, your home isn’t as rundown as the ones they pick. And flippers are professionals who know which projects they need to undertake to turn a deal-killer into something desirable. And they generally have long-term relationships with contractors and suppliers that get them discounts on the work.
Best and worst improvements
The fact is very few larger investments add more to a home’s value than they cost. Each year, Remodeling magazine compares the average costs of different projects with the amounts they add to a home’s market value. In most cases, the cheaper renovations paid off the most. Here are some examples at each extreme:
- Garage door replacement in an upscale home — You get back 98.3 percent of what you spent
- Manufactured stone veneer — 97.1 percent
- Backyard patio — 47.6 percent
- Master suite addition in an upscale home — 48.3 percent
So you probably don’t want to add that $130,000 master suite addition if you’re selling. But, if your current siding is an eyesore, it may well be worth going for a manufactured stone veneer, if it could make selling your home easier and quicker. It all depends on your home’s competition (your neighbors!) and how you stack up.
Serious defects: no way out
Obviously, serious defects need fixing. If your roof is leaking, your window panes are broken, or there’s a crack in the foundation, buyers will assume that’s the tip of the iceberg. There are likely to be more repairs required than they can see, potential buyers reason. And their offers will reflect that fear.
If you can’t afford to make the repairs, by law you must disclose the issues anyway. It may help to commission an inspection so you can show potential buyers what they are dealing with, and they can make offers with both eyes open. FHA 203(k) mortgages let buyers finance repairs when they purchase the home.
You, the seller, are allowed to contribute up to 6 percent of the selling price toward FHA closing costs, which might sweeten the deal for buyers looking at major repair issues.
The other way out is an escrow holdback, in which some of the sale proceeds are held back in an escrow account and released to the contractor who completes needed repairs after the sale.
Selling a home — the essentials
So far, we’ve mainly discussed improvements you possibly shouldn’t make when you’re selling a home. But there’s a long list of things you should do.
These are mostly items that you can complete yourself, so they’re low on cost but high on the effort. If you can afford it, you can bring in professionals to do most of these tasks.
Curb appeal makes the deal
Some homes look like dumps from the outside but are gorgeous inside. That’s a matter of personal choice when you’re living there. But it isn’t when you’re selling.
Potential buyers tend to drive on when they see a home that looks ugly or rundown. Homes that look good from the street invite people in. So here’s a checklist of tasks that will make buyers want to come inside:
- Clean your gutters
- Pressure wash your sidings, pathways and driveways
- Repair (or replace) windows, roofs, sidings, driveways and paths so your home looks cared for
- Weed your flower beds and trim your lawns, bushes and shrubs
- Plant colorful and tasteful flowers that will bloom when you’re selling
- Add colorful window boxes and tubs
Your goal is to entice buyers past the first phase of a purchasing decision. As a marketing manager, you’re getting the packaging right.
Depersonalize the home
The things you think make your home an expression of your personality (your collection of 235 Victorian teapots in the entrance hall, the lime green paint in the family room, the terrarium full of rattlers in your bedroom …) may not appeal to all tastes.
As a marketing manager, you know that nothing appeals to all tastes, but you do your level best to appeal to as many as possible.
And that means depersonalizing your home. It’s fine to keep a bit of your character. Just tone it down. Leave only your two best teapots in the hall. Repaint the family room in a boring, inoffensive color. Keep just a couple of rattlesnakes in the bedroom.
Kidding! Leave all of them in the care of a fellow ophiophilist. And do a headcount to make sure none emerge from an HVAC duct during the open house.
Clear the clutter
Rent a storage unit or borrow space in a neighbor’s garage and use it for:
- Bulky furniture, which makes rooms feel smaller than they are. And you want visitors to feel they can navigate around your home without tripping up or bumping into things
- Ornaments and knickknacks can be pretty, but too many can be oppressive. That goes for excess books, too
- Clothes and shoes should be pared to the essentials to make closets appear organized and spacious
- Anything potentially offensive, like political posters, religious icons, nude pictures or taxidermy should probably be removed during the selling period
- Old files and paperwork should be removed to reduce clutter and also protect your privacy
Some suggest removing fixtures you want to keep when selling a home. The logic is to avoid putting anything out that a buyer might fall in love with and fight with you over their removal. Don’t remove these things if it would diminish your home’s attractiveness, though. You don’t want gaping holes or unadorned light bulbs in view.
When you’re selling a home, by all means, set aside a small budget for little improvements that deliver a lot of bang for your buck. As a marketing manager, you’ll call that cost-effectively adding perceived value.
Look for things that appear a bit shabby, worn or dated and ask yourself whether replacing or improving them might add to your sale price or get you a quicker offer. Those might include:
- Replacing torn flooring with something more modern
- Putting trendier fixtures in the kitchen or bathrooms
- Retiling or regrouting kitchen counters and bathrooms
- Putting new doors on your existing kitchen cabinets — or just painting them or upgrading the handles
- Replacing dated lights
- Buying cushions or throws to add accent colors to your rooms’ new, neutral decor
Make your own list based on your home’s weaknesses.
Clean, clean clean
If you do nothing else before selling a home, do this. Nobody wants to buy a dirty house.
If you lack the time, inclination or ability to deep clean your home yourself, get in a professional crew. And, once it’s perfect, keep it that way for as long as the home’s on the market. Wash (or hire someone to wash) your windows to make your interior appear brighter and fresher
As part of the cleaning process, be sure to eliminate all smells, including pet-related ones. None of us knows how our home smells unless we’re arriving back after a long vacation. So ask a friend to come in and be brutally honest.
Talking of brutal honesty, get as many opinions as you can on what you’ve done to prepare your home for sale. Ask friends who have good taste in home decor what they would do to make it more sellable. And ask the same question of your real estate agent. Finally, don’t hold it against anyone for telling you the truth when you’re selling a home.Verify your new rate (Oct 20th, 2020)
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