By Neil Goradia
Your clients want to sell their home for the most amount of money, and if they need to make repairs or updates, they want to ensure they recoup what they spend.
Welcome to my world.
I recently sold my house. I have to tell you, I was really stressed out. Turns out most people are stressed when selling their homes. In fact, recent real estate research shows 9 out 10 people are so stressed when selling a house they couldn’t make a simple decision.
I’m here to tell you what your clients do not need to fix when selling a house. As real estate professionals, we can take a lot of the guesswork out of it and help them avoid costly mistakes.
Selling a House is a Big Deal
It’s such a big deal that it can be worth hundreds of thousands of dollars and takes much more than planting a “For Sale” sign in the front yard.
But if your clients are glued to television shows like “Property Brothers,” “Fixer Upper,” and “Flip or Flop,” they might think it’s no big deal to remodel a house completely.
Unfortunately, those television shows are terrible at showing what’s required to renovate a home. They’re professionals, and they always have someone they can call when disaster strikes. They can’t advise your client on what not to fix when selling their house.
“I have watched Property Brothers and they make it look so easy. In the blink of an eye, the house is transformed from drab to fab and sold for top dollar. I wish it were that easy!” says Dr. Suzanna Wong, a chiropractor in San Diego. “My brother-in-law is a real estate investor and I have seen and heard the reality of it. There is a lot more to it than they make out.”
Home Improvements and Renovations to Sell
Some homeowners choose their renovation projects based on the return on investment (ROI) they can expect from the work. However, that strategy isn’t always solid because most major home remodeling projects only offer about 50% to 60% return.
A homeowner’s ROI sinks even more when they update something that isn’t actually in need of significant improvement, just to keep up with a recent trend.
“When preparing your house to list, make sure you focus on repairs that will recoup your cash,” says Shaun Martin, a home renovation expert in Denver. “It’s easy to spend money on renovations that cost more than they are worth. My best advice would be to talk to a local real estate pro you can trust.”
What Your Clients Should Learn
- Improving curb appeal, cleaning the house, and decluttering are essential projects when you sell a home.
- Expensive remodeling projects aren’t a good idea right before you sell.
- Always consider the ROI before conducting repairs.
- Update only as much as you need to for the character and quality of your neighborhood.
Gather Data for Your Sellers Before They Make Repairs
Getting a quick sale is essential to many homeowners. Sometimes all it takes is a boost to a home’s curb appeal and a few weekends spent cleaning and decluttering before listing the property. Clearly outline the condition of the market for your sellers and advise them on what repairs will get the fastest and most profitable sale of the home.
Of course, provide your sellers with a comparative market analysis (CMA), which will show them how their house stacks up against other nearby homes for sale. The research might indicate that most of the homes for sale nearby are similar, which could indicate that your sellers won’t need to do many repairs before putting the house up for sale.
On the other hand, if the CMA indicates that the home lags somewhat on updates and presentation, you should suggest they get some estimates on a few repairs. The CMA is an excellent document for figuring out what not to fix when selling a house.
Forgo a Major Renovation
A brand-new kitchen might make your clients’ dreams come true. However, a beautiful new kitchen may cost $100,000 yet only boost the sale price by an incremental amount. According to a report published by Remodeling Magazine, a significant kitchen remodel only nets a 54% ROI. The kitchen might rank as the number one large project of what not to fix when selling a house.
Your clients should save that project for their forever home. Or, if they’re not planning to list for several years, a major renovation might make sense because they can enjoy the fruits of their labor before selling the house. On the other hand, if your clients are ready to sell as soon as possible, they should avoid major remodeling projects like extensive bathroom renovations, kitchen renovations, and master suite additions.
Don’t Start a Huge Project You Can’t Finish
Most home remodeling contractors include an emergency fund as part of their estimate because something almost always goes wrong during the work. If a contractor tells your clients it will take six weeks to update a kitchen, it’s always a good bet to increase that estimate by 25%. It’ll probably take eight weeks, if not longer.
Although the effects of the pandemic will fade with time, manufacturers of all kinds are still seeing significant increases in delivery timelines for materials. Statistics tracked by the Federal Reserve indicate that the manufacturing sectors in states like New York, Philadelphia, and Texas are experiencing delays of more than 300% over what they were experiencing before 2020.
The delays don’t necessarily mean your clients need to cancel renovation plans. However, it would help if they held off starting demolition until a contractor has all the equipment they need to complete the job. Your clients shouldn’t tear out the countertops in their kitchen if the marble isn’t even in the country yet and is sitting on a container ship somewhere off the coast.
Ignore Popular Trends
Much like clothing, popular trends in home remodeling projects come and go. Making updates because they’re popular could destroy the first impression a buyer forms of a house. The unpainted wood decor and wicker furniture in style this year might become the beaded curtains and popcorn ceilings of the future.
The best option for making a house as appealing to as many buyers as possible is to keep things clean, neutral, and classic. Don’t rip the cabinets out and install floating shelves at great expense because it’s popular for the kitchen. Instead, sellers should consider upgrading the cabinet hardware and painting their kitchen a neutral color like white.
Frequently Asked Questions
Here are some suggestions on how to address common questions from potential sellers.
Is selling for cash a good idea?
Selling a home quickly for cash is convenient, but cash offers are often below what you might receive by cleaning and decluttering your home and selling it to a traditional buyer. A huge benefit of cash is that you can usually sell your house as-is. Of course, a cash sale is not for everyone.
What’s absolutely necessary for selling a house?
Generally, you’ll want to sell a home that’s free of any safety issues. Problems that might prevent your home from selling include leaky roofs, bug infestations, and sewer problems. You might want to consider a pre-listing inspection to get a better idea of what repairs will be necessary.
Is it a good idea to stage my home?
Staging costs money that you will likely recoup with your sale. However, for some homeowners, the simple act of decluttering and deep cleaning the home is enough.
The Bottom Line
You sellers might not need to fix anything substantial in their home to get a quick sale for their asking price—as long as the home is priced accurately for the local market. It’s your job as a real estate agent to help them figure out what to fix and what not to fix when selling a house. You can use basic math to determine whether it’s worth it to upgrade, repair, or remodel various parts of the home. Your clients shouldn’t take on any giant projects immediately before selling, and they should try to keep things simple and neutral to appeal to the most potential buyers.
Neil Goradia is the founder of Go Indy Real Estate in Indianapolis. In addition to being an agent, he has a background in fix and flips, land development, and private lending. Connect with him on Facebook.