Homeowners, are you planning on selling your property anytime soon? Before you do ANY remodeling or fixing, make sure you take a good look at the market and ask your Realtor® for a comparative market analysis. This will give you a range of what you can expect your home to realistically sell in. After all, you don’t want to spend money if it won’t be of benefit. Your home’s current condition may be standard for the area, so the market value may lie in the middle to high end of the range. If it needs a lot of updating, it’s considered a “cosmetic fixer” and would, of course, lie at the low end of the range, if not a bit lower depending on how much work needs to be done to bring it to current market standards.
These are usually fairly major projects. Most remodels, if done well, do add value to a property. The catch, is that the amount you spend on your remodel may exceed what the average Buyer is willing to pay. For example, spending $85,000 on a remodel doesn’t necessarily mean you will receive $85,000 more for the home than you would without it. Quite often, Sellers spend a significant amount of money on a remodel and then price their home higher than actual market value. What these homeowners are forgetting is that the value of a property lies in what Buyers are willing to pay for it. Many Buyers look at the comps in the area to gauge how much a property is worth. If you price your property unrealistically, Buyers will most likely either avoid it altogether, make low offers or none at all.
It’s important to ask your Realtor® what features the current home Buyers are looking for. Buyer wants tend to change throughout the year. Quartz kitchen countertops may be popular this summer and then fall out of favor in Fall. Since Realtors@ work one-on-one with their Buyer-clients, we have an excellent sense of what they are looking for so be sure to confer with us before you choose your renovation.
According to the “2015 Remodeling Impact Report” by the National Association of Realtors®, a complete kitchen remodel yielded significant positive Buyer response and helped with the sale. The renovation or addition of a new bathroom, roof, flooring, expanded master (with an en-suite bathroom), and heater & A/C also helped with sales.
These are things like broken pipes, cracks, superficial blemishes, malfunctioning HVAC systems, peeling paint, etc. You want to eliminate as many obstacles as possible in the sale of your home. Depending on the work to be done, it may be worth it to make the fix, to easily eliminate any unnecessary obstacles to the Buyer’s favor. Taking care of relatively minor fixes limits the red flags in a Buyer’s mind while touring the home and reduces the potential of fix-it requests during escrow. The cost of these fixes are usually relatively minor. While they will most likely not raise the value of the home, they will help it sell.
Some fixes are extremely important and could make or break a sale, depending on the type of loan your chosen Buyer has. For example, when dealing with an FHA or VA loan, their appraisals tend to be stricter than conventional options. You’ll want to have an electrician cover any exposed wiring, replace any missing light fixtures or electrical outlets and take care of anything that could possibly be considered a health and safety issue. If the property was built in 1978 or earlier, it’s assumed that the builders used lead-based paint, which is considered a health hazard. You’ll want your painter to completely sand, dispose of all waste and re-paint all areas where chipping is visible.
Renovations and remodels can be smart moves prior to a home sale and can make the home more attractive. The trick is to do the appropriate research by consulting professionals, to gauge whether the investment will yield a positive dollar value for your bottom line. The Studio City market is strong and even fixers are fetching high prices.
Call me and let’s come up with a plan to get you the highest dollar amount for your home and in your pocket.
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John Aaroe Group