Welcome to Part 2 of Seller Sanity, a 3-part blog series I'm writing for prospective sellers in 2020. You are invited to check out Part 1, Staging a Home to Appeal to Millennials in 7 Affordable Steps and stay tuned for Part 3, The Six Biggest Mistakes Sellers Make dropping later in 4Q20.
Whenever homeowners think they might be selling it's natural to wonder what they need to do to get the "best price."
I believe a better question to ask is what to do that will deliver your best return on investment.
Return on Investment, or ROI, includes money of course; but also time, labor, and market trends that are being missed — or maximized. This #SellerSanity installment helps future sellers put total investment costs into perspective, consider factors that add up (or don't!), and provide reliable bets that are safe to bank on.
The Bottom Line: No matter your sale price ... if your overall investment of money, labor, and market timing isn't returned at the closing table — you lost. And missing an extraordinary sales opportunity by delaying a listing during an unprecedented seller's market could be the most costly seller mistake of all.
THE HARD FACTS
Substantial home improvements almost always yield less than you paid at resale. Here is Remodeling Magazine's most recent report that outlines typical project costs vs. resale locally, regionally, and nationally. In all but two categories, cost is less than fully recouped with many returns being in the 60-70% range.
This is not to suggest sellers avoid doing upgrades or proceed with needed improvements. It is to alert them to the fact that money put into a home is not guaranteed on resale, even in an extreme seller's market.
I recommend that any substantial project be one that a seller actually wants and has the opportunity to appreciate long before listing their home. In real estate, this is referred to as the Joy Factor.
CONVENIENT TRUTHS
Being the most affordable home in the neighborhood at the time of sale often pays off big. Ironically, the most expensive home on the block is often its competition's best advertising and traffic-enhancer.
If your home is in a buyer's desired location, offers the right layout and features, is competitively priced, and within their budget, necessary updates will often be seen as welcome opportunities to many buyers who prefer to create a home in their style — and land a house they can actually afford.
THREE SURE SELLER BETS
1 — Make investments "under the hood." They're not as fun, but they are smart. Take care of maintenance matters that will be uncovered in inspections later. HVAC systems need servicing? Tackle it. Water heater at the end of its useful life? Keep an eye out for sales and install a new, larger one. Hail damage? Submit a claim and get your windows and roof in tip-top shape before showings start. Making these types of improvements achieves two important goals. It helps your home sail smoothly through sales contingency periods. As an added bonus, you also get to describe every one of these smart moves in your listing. Doing so will grab the attention, and trust, of future buyers.
2 — Invest your dollars into creating an even larger pool of contenders. Instead of spending time and money guessing what buyers want, considering offering a seller credit at closing so buyers can do preferred updates after closing. Or, think about offering first-time buyer down payment assistance. The best way maximize any sales price is to create a multiple-offer situation. Enlarging your pool of qualified, interested buyers can be a very effective strategy.
3 — Make a great marketing impression without breaking the bank. If you have the time, motivation, and are looking for some home projects to keep you busy, getting your home into great marketing shape can be done with smart and low-cost bets. Any of these inexpensive and manageable ideas make great buyer impressions, and freshen up a dated home in a weekend or two ... affordably.
Anything that adds interior light. Replace dark window treatments with lighter options. Update bathroom or kitchen lighting with stylish, brighter fixtures. Paint dark, outdated cabinets white.
Smaller jobs that deliver big. New appliances. Updated bathroom fixtures in the master bath or main floor bathrooms. Fresh interior paint in lighter designer colors.
Great curb appeal. Create a welcoming entryway with a bold front door. Add attractive house numbers. Set out colorful pots with seasonal plants. Make sure your yard is healthy, welcoming, and well-maintained before you go to market.
THE BOTTOM LINE
DON'T chase a sales price — DO the math. No matter your sale price ... if your overall investment of money, labor, and market timing isn't returned at the closing table — you lost. And missing an extraordinary sales opportunity by delaying a listing during an unprecedented seller's market could be the most costly seller mistake of all.
★ S P E C I A L F E A T U R E ★
DID YOU KNOW? Whenever you add significant value to your house it's essential to contact your insurance agent. Let him or her know of your project and make sure your job is covered from start to finish. Craig Kirscht with the Kirscht Insurance Agency provides 4 smart tips in this short special feature, "But Are You Covered?"
Looking to sell in 2020? As you are reading this post, there is an enormous pool of well qualified, pre-approved buyers in the metro area hoping to take advantage of historic low interest rates and land their new home. There's simply not enough inventory to meet the huge demand. Multiple offers are common, especially in competitively-priced listings under $600,000.
If you are thinking about selling your home, let's talk. I offer comprehensive professional services, am an expert in the metro market, can help you sell with confidence and achieve the results you want. We can go over my 21 Point Marketing Plan which will get your home sold quickly for the most money, and introduce you to a long list of very happy clients you are welcome to call for references. Be in touch today, I'd love to hear from you!
Michelle Schwinghammer is a REALTOR®, Certified Negotiation Expert® and Pricing Strategy Advisor® who helps people move forward in Colorado.
I HELP PEOPLE MOVE FORWARD.
HOW CAN I HELP YOU?
Schwingstate, LLC, 30480 Stagecoach Blvd, Evergreen, CO 80439
(303) 638-8711, michelle@schwingstate.com
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