Don’t remodel that house if you are selling now

Selling your house? It’s not time to spend big dollars on things that will not move the needle with prospective buyers. This article will take you through the key things to do and what not to do when preparing your house for sale.

Many years ago during the second and biggest housing downturn (late 2000’s), home prices were skyrocketing. This was one of those rare times when you could spend some money on updates and not care about a 100% return because your equity was so great.

On the other hand, because there was such a demand for houses, it did not make a difference if the house was almost falling apart, it would be sold at a price far above what you had paid for it. So, why put money into your house if you do not need to for a sale? Want to know an item that you must without a doubt fix? Active termites and damage that may cause structural failure.

Fix termite damage

If you suspect you have termites and damage, get it fixed before you list your house on the market. The buyer’s termite report will indicate no actives and repairs were done.

Fixing everything that you see is necessary to keep the buyer from trying to use the issues to get a reduced price. Rotted wood, broken windows, torn or missing window screens. These are all small things but they indicate lax maintenance and buyers may wonder about what they can’t see.

Now let’s get into the meat of the article. Don’t replace the water heater air conditioner or old appliances if they work. Take a look at that roof. If the roof requires minor repairs get that done. You should be aware that the age and quality of your roof will possibly affect the market value of your house. If the house is located in a wind area, it will have a big impact on insurance rates and buyers know this.

I do not suggest that you replace your roof unless you have substantial equity in your house and the roof is in poor condition. In high-wind areas near coastal areas, installing a new roof adds value to the house and will help sell it faster as the insurance rates will be lower.

Your Goal: To get a higher price for your house

Home buyers who work with a local real estate agent have the best opportunity to buy for a lower price. An experienced real estate agent will generally know what to look for and how to use even cosmetic repairs as leverage to obtain a lower price for their buyers.

The idea is to spend as little as possible to overcome obstacles to getting your higher asking price. You do this in advance of listing your property. Resist the need to list before you have taken an assessment of your property. 

This is when you hire a real estate agent to work for you. Your agent will talk to you about selling your house and what you should do to make it ready for sale. Many of the things your agent will talk about are included in this article. You do need an agent to walk around your house and help you make your list. Selling your house comes down to making it feel welcoming to buyers.

Let’s start with a list of things you want to look for and fix as they are what’s called the low-hanging fruit. These items often require cosmetic changes. Property flippers call this list the “lipstick approach”. You will create a home inspection report of your well before an actual professional comes out. However, it’s not a bad idea for those of you who own high-end houses to hire a property inspector who will create the list for you.

This list below includes some but not all items to check and fix:

Easy fixes – list

The list above will get you started at little cost to you and yet paying attention to these items can add value to your house or at the very least remove items that even cash buyers may want to negotiate for. There is no need to go through a major renovation of your home.

In fact, without laying out another table for you, understand that most major remodels of kitchens and bathrooms will get you at most 50-60% of the amount you spent back in the sale price.

Curb appeal and broken things

That home inspection that you have done or will have someone else do should be part of your task list. Keep in mind that a home inspection done by a professional will not give you a list of items that you need to improve your home’s curb appeal. Many of those items will be in the list above. There are two basic areas to focus on. Things that need to be repaired because they don’t work or are broken and the curb appeal of your home.

Short of remodeling your house to sell it, some major areas will help in selling your house faster even if they don’t repay the cost entirely. One is new flooring. If you have carpet and that carpet is badly stained, it will be a drag on your price and someone’s decision to buy.

To start, many people no longer want carpets. If you are selling in an area near a beach carpet will be a negative. Carpets harbor odors that owners don’t notice. There are many replacements for worn or staned carpets which include refinishing the underlying floor or vinyl planks which are popular now.

Paint is great

Paint is not inexpensive today but a fresh coat of paint particularly in high-traffic areas can improve the look and feel of the house. That includes a fresh paint job on the exterior if necessary. I will get back to the interior in a minute but it’s time to hit on the exterior, back to that curb appeal which is critical for buyers who will live in the house. When the prospective buyers drive up, your house has to stand out. Particularly when market conditions favor buyers. First impressions mean everything.

I have driven to houses with clients where we kept driving because the curb appeal drove us away. Sidewalks pushed up by trees, dirty entrance with rusted light fixtures and bugs all over above the door. You may not notice this because you live there but buyers will and it’s a turn-off. Local agents will usually spot issues such as these as the first sign of a house that is not well maintained.

That front yard should be mowed, weeds removed and new sod placed if necessary. Trim the bushes and trees, plant new flowers, and otherwise make your house stand out among the others in the neighborhood. Trim trees that overhang the roof. This is a very important thing because the insurance inspector will be around after closing and threaten to terminate their insurance with branches overhanging the house.

Listing agent looks for items needing repair

Your listing agent should jump in to help you by noticing things that you do not. The agent can help add to your list. Don’t forget to look for wasp nests or other insect infestations such as fire ants.

I shared an experience with a house I purchased in the Quora article discussed above. My wife and I decided we needed to live on water. We found a very nice four-bedroom townhome located on an artificial lake with a dock. The property was in good condition.

The owners had recently updated their entire kitchen with all new counters and appliances. This was the first “used house” we had ever purchased and we decided to make it new again. We paid the sales price as listed because it was right at the market. 

Your tastes are not their tastes

Before the ink was dry on the purchase contract, we started major renovations by demolishing almost everything. We sold the new kitchen to one of the contractors, a good deal for us and them. After about two months we moved in. Several months later the sellers were visiting our neighbors and they learned we did “some” remodeling.

They asked if they could look around and we said yes. They were shocked to see the entire kitchen was remodeled yet again. We overheard them saying how much it cost them to remodel the kitchen just to sell the house. If they had known the new buyers were tearing it out they would not have spent the money.

Exactly. There is simply no need to pour big dollars into your house particularly in this real estate market or any other unless the house is in serious need of the changes. The new buyer will likely make changes when they move in. It’s impossible to tell what other people want except for the items we are discussing here. With years of experience, I can tell you that people want to look at a clean well-organized house. More on that.

Pet odors – Very big deal

Your pets may be a problem. Dogs shed and some people are allergic to dogs and cats. Both animals can produce odors in a house. I have seen houses where dogs have urinated so much against a wall that the urine caused rot in the walls. Cat and dog urine can penetrate the edges of the walls and creep up the walls or worse yet, create moisture for termites. Another case.

A rental property that I recently sold was recently vacated. The tenants were terrible. Their dog urinated so often that the carpets were destroyed. While removing the carpets, we found that the plywood floor was saturated with urine. Lots of work went into fixing that problem.

When you list your house it’s best to find a temporary home for your pets. Remove the cat litter box and collect any droppings in the yard. Remove any signs of pets including their food bowls. If you can’t do this, at least clean very well to remove pet odors. You may take a hit on the offering price.

Odor was overwhelming

I was showing a client houses that he was interested in buying. We went to a house and I asked my client to wait outside to be sure no one was there. Yes, I reserved time but it’s always prudent when you see a car in the driveway. After walking into the living room, I turned around and walked out.

This was not a house that my client would even consider buying. We left. The odor from pets was overwhelming, the worst that I have ever experienced. The listing agent asked how it went, I said have you been inside? The seller should have called a professional to remove the odors.

Remember, clean and well-organized. Since you are moving anyway, it’s time to pack away what you do not need for the next few months. Boxes of household items stacked neatly in the garage or a room will not offend anyone as much as a kid’s room with toys and stuff all over. This goes for removing family photos and art that may be considered too unusual for potential buyers to see.

It’s time to discuss the big stuff that may cost you some money but if you do not take care of them you will maybe required to at closing:

More expensive fixes – table

The above list includes the more expensive items that you may have to attend to before selling your property. All of these items will be on the home inspector’s list and if they are good, these items should they exist will be flagged. It’s a long list so I will explain some of the items that may not be as apparent to a typical home seller.

Almost all cities and counties have building codes for houses. These codes require permits before add-ons and even some work on the building such as replacing an electrical panel. Where I find that most issues are with unpermitted addons.

This includes the awning you added over the driveway. If it’s attached to the building it probably requires a permit. Consider the problems that a buyer would encounter if they bought your house and a code enforcement person found the buyer in violation. There are only two choices, tear it out or fix it. Both will cost money.

Unfinished rooms

Unfinished rooms. You would think this was not uncommon but it is. A door is missing or a wall is not complete. These issues can lead to safety problems as well. Keep in mind that your insurance agency will send an inspector after the house is purchased. They will be looking for safety issues such as no stair rail on porches over a certain height.

The finance company will send an appraiser over, depending on the loan program, broken windows and safety issues can prevent loan funding. They may not permit a loan to close if some items are not fixed. For example, if there is foundation damage or serious structural problems they may not permit the buyers to buy your home with their money. For these reasons, the best way to avoid potential problems for the buyer is to fix what you can before you it on the market.

Sellers can make substantial reductions in price

The items on the above list are the most often in contention during the closing process. They can lead to you the seller making substantial reductions in the selling price of your house if the current condition is not fixed by you. That damaged garage door that looks bad to a potential buyer should be repaired or replaced.

Even in a seller’s market, it’s difficult to get the list price without giving some concessions. The new homeowner wants to move in without working hard at replacing kitchen cabinets on the first day. 

As a buyer’s agent, there is nothing I love more than to find lots of things that the seller should have fixed. If the seller can fix it for $10, my clients want $25. Why? They have to find someone to do it, they are new to the area, and becoming a contractor is not something most people want.

The owner could not afford a roof

Not long ago, I found a house for a client. It needed a new roof badly. The owner could not afford to install the roof before a sale was to be closed. Previous offers fell through because the finance company would not pass on the roof. The owner tried for many months and his agent worked hard at selling his house but no buyers would pay his price with a bad roof.

I told the selling agent that my client was making an offer that included a reduction in price equivalent to buying a new roof. This was the best deal he was going to get. The seller agreed. I found a great price on the roof replacement that came in several thousand lower than the concession.

The point is that the owner could have found the lower price and worked out something in the closing process. Fix the critical things before selling your house or you will get less for it.

Real estate investors who intend to do a flip of your property may look at most things as cosmetic issues because they have already worked out a budget for a complete remodel. Of course, you will pay for this at the lower price they negotiated because you did not make repairs. The value of your home will always be affected by its condition unless you decide to sell it “As is, where is”.

Logan Anderson Gulf Coastal Realtors, we are experienced in helping our clients prepare for the sale of their homes. Contact us early in the process so we can provide our expertise to you well before the house is listed. We will tell you when we think it’s ready to sell for the highest price.