When selling a home in California or anywhere else, your chances for a fast sale increase when you make the property attractive to as many buyers as possible, and this often means doing some upgrades on your home.
However, home improvements and major renovations can cost you hundreds, even thousands of dollars which you may not be able to recoup.
Does it make better sense to invest in fixing your home before putting it up for sale, or is it wise to simply sell as is?
Here are some of the things to consider:
- Compare the “before” and “after” values
Will renovations improve the value of your property, and if so, by how much? This is a question that’s best taken up with your Realtor who has the experience and know-how about market trends and property values.
Your Realtor can do a Comparative Market Analysis, which takes into account the sale prices of comparable properties in your area. The analysis compares the most significant features that have the greatest impact on home prices, such as the number of rooms, the square footage, amenities, and so on.
Based on this, you can estimate how much an improvement can add value to your property. For example, if most homes in your neighborhood have state of the art kitchens and yours has seen better days, that could negatively affect your home’s desirability, and consequently, the price you can get for it. In cases like this, it would probably be worth investing in a kitchen upgrade.
On the other hand, if your kitchen is too fancy compared to other homes in your neighborhood, chances are, buyers interested in your area may not be willing to pay a premium for it, and you could end up losing money on the investment.
- Compare the benefits of minor vs. major renovations
A Comparative Market Analysis can highlight the kind of renovations that may add value to your home. If your kitchen needs upgrades, for example, the CMA can help you determine the extent of renovation to make.
Remodeling Magazine’s Cost vs. Value report tracks how much a renovation project’s cost may be recouped at resale. For 2020 and previous years, it has consistently shown that a minor to midrange kitchen remodel yields a higher ROI than a major kitchen remodel.
In many cases, lower-cost upgrades, such as refacing the cabinets or updating some appliances, are enough to improve home values and make the property more appealing to buyers.
This applies to other remodeling projects, such as improving the bathroom and enhancing the landscaping.
- Is your home a fixer-upper?
What constitutes a fixer-upper may vary according to buyers’ points of view. To some, a fixer-upper is one that needs only minor or cosmetic repairs, such as a new coat of paint or new carpeting.
Other buyers, particularly investors and home flippers, consider fixer-uppers as properties that need extensive repairs and renovations, such as replacing the foundation, removing walls, and installing new flooring.
In either case, buyers who are attracted to fixer-uppers are usually bargain hunters who will factor in the cost of repairs in their offer prices. This means that if your home needs major repairs, you can’t expect to receive multiple offers for it or sell it at top dollar.
However, the cost of extensive repairs might also put a strain on your budget, so it’s important to analyze how much you could lose if you sell the home without improvements versus how much it will cost you to undertake the needed fixes.
- Are you selling in a hot market?
In deciding whether to do repairs or sell as is, you should also consider when is the best time to sell a house in your area.
A hot market is often a seller’s market where the demand for homes is greater than the supply. In a seller’s market, there’s a good chance that buyers will overlook minor or even a few major repairs and agree to your asking price or something close to it.
It’s important, however, to be upfront about the condition of the property. If the buyer finds out about any problem or defect from a home inspection, they may renegotiate the price, which can delay closing, or get out of the sale altogether.
Even in a hot market, a home that requires numerous major repairs will only attract bargain hunters. In any market, most buyers prefer a move-in ready home.
In a buyer’s market, the chances of selling a fixer-upper at a good price are even less, so unless you’re willing to make at least a few improvements, you may end up selling the property at a substantial discount.
Work with a Realtor who has your best interest in mind
The Manel Sousou Team will help you make informed decisions and create the best strategy to sell your home fast and at the highest possible price. For all your real estate needs in Dublin, CA, the Tri-Valley region, and the Bay Area, call us at 925.413.4511 or send us an email at manel(at)sousouteam(dotted)com.