This week, a client asked on LinkedIn for a list of priorities of what to fix/upgrade before listing their home for sale. Great question. Here goes!
Don’t Do Anything
This was the first thing that came to mind. “Home prices are falling” is a true statement. In fact, a fairly common motivation for selling today is that the homeowner anticipates further declines in values in the near future.
If someone is looking to sell their home in this environment, isn’t it counter-intuitive to invest too much time, money or energy in further improving the property? Why invest in an asset with a falling value?
Generally speaking, these days, our specialist listing agents encourage our clients not to hold up the list date with renovations and not to invest unnecessary resources into their home. The investment that the homeowner is planning to sell is already large enough!
There are lots of perfectionists out there (trust me, we’re with you), but if you are the sort of person that gets a weird sense of satisfaction from that “complete” feeling when a project is done, now is the time to take a step back…
We love our homes, especially ones we’ve owned for a while and worked on. But there comes a time to stop and that time is now. As you will see later in this post, it is very hard to get a positive rate of return from home renovations, even in a balanced market let alone one undergoing a correction.
Don’t do that extra bathroom. Now is not the time to add granite.
Focus on Fixes
Buyers can be very sensitive to the following:
Old, stained or dirty carpets
Heavily damaged paint, or unusually bright or dark colours
Cigarette smoke smell or discoloration
Moisture penetrating through the building envelope. Mould.
Large capital projects
Today, roughly 10% of listings on the Fort McMurray MLS® are foreclosures/court listings. More significantly, a full 25% of listings that sold in the last 30 days were foreclosures, court listings or relocations (company sales). These are aggressively priced and they can’t be ignored as competition. They are being sold “as is, where is”.
Removing bad things about your home either before or during the listing is sensible as long as it is not very costly.
For example, if you have a home with badly stained carpets, a leaky roof, really bad paintwork and it smells like smoke, then we can more-or-less guarantee the following:
Switching out the carpets, doing a professional quality paint job and replacing a terrible roof, will very likely have a positive return. This is because we are removing serious issues that concern most potential buyers.
But there are a couple of really important considerations…
Time is Money (And So Is Money)
Average home prices have fallen by about $140,000 in the 31 months since December 2014. That works out to be about $4,500 a month, and this includes a period of increase immediately after the fire. Conclusion: Prices are falling by approximately 1% a month. Balance will come, but for now, prices are decreasing.
If the renos you are planning are going to take 1 month or 2 months, then that needs to be factored in. Also, if you can’t find reasonably priced contractors (maybe because of the rebuild), that’s something to think about, too.
Are there items that can be done once the property is listed? Maybe the list date doesn’t need to be held up by the renovations. A quality listing agent will have no problem refreshing the marketing content as your home is improved.
I’m Stressing Out!
If you are susceptible to stress, don’t renovate. Just list it and let’s get you where you want to go. If you do decide to fix some deficiencies, why not have professionals take care of it (your agent can refer you to the best in town)?
If you’re a stress-head (most people are in some way), then let’s think about having your home pre-inspected so instead of lying awake at night, worrying about what the buyer’s home inspector is going to say, you can be wandering around with a caulking gun.
Then sit back and relax. Watch the world-class marketing video we’re going to produce for you. Imagine your future.
What Does RE/MAX® Say?
Our brokerage is RE/MAX® Fort McMurray. RE/MAX® is not only the world’s most powerful real estate brand, but an organization of experts with a deadly blog.
When I was asked this question on LinkedIn, the other thing that jumped to mind right away was a table I recalled seeing 5 years ago. In it, RE/MAX® had listed the return on investment (ROI) for different home renovation projects. A quick blog search today, and “hey presto” – I found this great article….
The big news is that even in a balanced market, most types of reno’s typically have a less than 100% return (you don’t get your money back). In a buyer’s market, it is even harder! Interestingly, the only renovation that consistently provides a return over 100% is flooring based on the blog (link above).
Man, do people ever hate grotty carpet!
Bringing Our “A” Game. Every Day.
You’ve decided to sell your home.
This amazing, beautiful, special place in the world (and your heart) is something you have, for your own reasons, decided you no longer wish to own.
That makes it an asset, just like a Suncor share. Time and time again, we have found that homeowners who are able to emotionally detach themselves from their property, systematically make better decisions.
Our amazing specialist listing agents will sell your home. But they will also be there to support you emotionally. Central to both objectives, they will encourage you to make high-quality decisions regarding the best strategy to divest yourself of this asset, in order to get the absolute top dollar for it, and keep as much of your hard-earned cash in your pocket as possible.
How much work to do, what not to do, who to hire to do it, and when? These are all important questions and the specific answers to your questions are best answered face-to-face. Our listing agents are ready to prove to you that we live by our mantra:
Bringing Our “A” Game. Every Day.