5 Rules to Remember When Listing your Home
Whenever an agent lists a home, they face the inevitable questions: How much should I do to ready my home? Should I buy new appliances? What about my oak cabinets? Should I upgrade the flooring?
Every broker answers these questions differently…and for good reason. No case is the same. Of course, new appliances, new flooring, new everything makes the broker’s job easier, but does it really increase the value of the home? Not necessarily. I can confirm it will decrease the number of days the house remains on the market though, so if you want to move the home quickly, consider these upgrades, but use caution before you take out an equity loan hoping that you will recoup the cost of upgrades in the sale price. Upgrades may not be necessary!
The old adage, there are three important features to consider when buying a home still holds true:
Location Location Location
Keep this principle in mind when selling your home as well. Your neighborhood limits the value of your home. Don’t forget that fact. I’ve seen too many owners pour excessive amounts of money into a remodel, list their home for $400,000 dollars more than any other property around them, and wonder why the home does not sell. This lesson falls under the Law of Regression; high valued properties tend to suffer when in proximity to low valued properties. Today with Zillow, Trulia, and Redfin marketing homes on the web, buyers understand the value of the neighborhood and the listing price before they arrive to view your home. They are educated and will rarely pay more than they should, no matter how beautiful your home looks.
Understanding this fact, keep the following lessons in mind:
Rule #1: Keep your remodels cost effective.
If your home is already going to procure top dollar in your neighborhood, limit the amount of extra money you spend updating the home. Instead, select low cost items to improve curb appeal both inside and out: Update paint colors on the wall, install a few $20 USB wall charger outlets in convenient locations, bark dust the front yard, and add some colorful annuals here and there. Little surprises impress buyers.
Rule #2: Do spend the money when it increases home value or you need to move the home quickly.
When your home value is lower than most in the neighborhood, spend the money to update some key features. Buyers expect expensive homes to be “turnkey”. Often buyers can afford a high mortgage, but will have little cash to remodel their purchase. With that in mind, Kitchens and Master Bathrooms still sell homes, but don’t overdo. Not everyone will appreciate the value of a Thermador range. By all means purchase the upscale model for yourself if you are an amateur chef, but for resale keep prices reasonable. Ask for last year models at local appliance shops; they are in vogue but a little kinder on the pocketbook. Also, most retailers will discount the price if you purchase a complete set of appliances.
Rule #3: Know your prices.
Many retailers will match online prices of other stores. Do not be afraid to ask a “Mom and Pop” shop with personal service to match a large retailers’ price. All they can say is “no”! Remember, they want the sale as much as you want the purchase.
Rule #4: Keep it neutral.
As much as you might love lime green on your walls, when you ready your home to sell, keep in mind that your home is no longer your own. You want to appeal to the masses. Tour model homes in your area. What are the current trends? Grey and cream walls may seem bland to you, but they make a buyer feel that they can move into the home and postpone any major updates for at least awhile. If you must have color to make you happy, purchase a lime green pillow and toss it where it catches your eye.
Rule #5: Use a little elbow grease.
Dirt turns off buyers. Smells turn off buyers. Projects turn off buyers. Clean the house from top to bottom. Don’t try and cover up mildew, smoke, or your son’s gym socks with a candle. First impressions leave lasting memories. Clean, ionize, and refinish that deck. One weekend of elbow grease will produce positive payback.
A little wisdom now, can have lasting benefits.