» Sellers Often Spend Too Much

Sellers Often Spend Too Much

Sellers Often Spend Too Much Getting Ready For Sale
By Kevin O’Connell

Whether it’s done at the advice of a listing realtor, or an individual decision by a seller, spending money to perfect your house’s appearance and appeal will most likely leave you without much of a chance of breaking even on the expenses. The disadvantage of this to sellers is they often spend a lot of money making the property look attractive to them. Unfortunately, the “perfect” house they plan to put on the market is perfect in their opinion, but many buyers will find it less than perfect to their preferences. Eventually they pass on property rather than pay the higher price and still have the expenses of making it the way they want it. The types of improvements, mostly cosmetic, are commonly called “buyer preference” issues.

There are a number of repairs and / or improvements sellers can make to property going to market that will not only enhance the appeal of the property, but provide a return on it’s cost in the form of additional value to the property and sale price. Issues such as the roof, mechanical systems i.e. heat, air, electrical systems, energy conservation improvements, will always add more value than the costs of the repairs, thus there’s potential of higher value to the buyer in exchange for a higher sale price. “Contributory value” is the market value added as a result of an improvement, and far too often, sellers consider cost to be equal to contributory value. They need to be aware that costs and values aren’t a dollar for dollar exchange.

In today’s market, particularly because of the recent history of declines in values, one of the most attractive features a property can offer to prospective buyers is the chance for them to fix it up the way they want to and not have to pay a higher purchase price. The message here is that you, Mr. & Mrs. Seller, may be able to sell your house more quickly and at a more reasonable value by doing less, investing less, and price it accordingly while trying to sell it. You need 3 basics to get started. 1.) Good curb appeal – it has to look nice when they pull up in front of it to see it, or drive by while searching. 2.) It should be kept very clean, regardless of the colors of the walls or types of flooring. 3.) It should SMELL clean. Walking through the front door to an unpleasant slap of animal odor, trash, even cooking smells is a turnoff. If it looks bad from the street, and smells foul, there’s strike 1 and strike 2 before they’ve even seen the rest of the house.

You also have the option of offering the seller assistance on the cost of improvements, cosmetic or otherwise, which can address both issues. You don’t spend more than you’re going to get back on the house, and the buyer gets to make it the way they want it with some help from you. There’s an equally good chance, or perhaps better chance, that the buyers will see more value in the opportunity to make the house the way they want it. There will always be buyers who want the house ready to move into without having to do anything in the form of work on the house. This is another example of the potential benefits of seller assistance with improvements and a better chance of recouping their investment.

Feel Free To Comment Or Ask Questions.

admin | March 10, 2010 9:00 PM

3 Comments

By Brooke, March 16, 2010 @ 7:29 PM

As an avid watcher of HGTV, they seem to preach the opposite. They have several programs which have experts come in to the home and tell the sellers just what needs to be changed to get it sold. Most of the time, it’s major redos. I’ve also noticed that several times, even though the makeover was completed, the house still didn’t sell. I guess it’s a 50/50 chance any way you look at it.
By Tom, March 17, 2010 @ 8:48 AM

I think with the number of homes on the market now you have to do everything you can afford to do to set it apart from others. But if you spend $ to help it look better, you may be making a change that the new owner is going to change once they buy. Keeping the outside looking nice and definitely the inside smelling nice work best for everybody.
By Sandy, March 26, 2010 @ 12:59 PM

As a buyer and a seller of a few homes myself, I have found that giving an “allowance” works much better than re-doing myself. If my house needs new carpet & I’m about to put it on the market, I’m going to work a flooring allowance into my selling price. That way the buyers can pick out the carpet they want. If I go ahead and re-carpet myself before selling, how do I know the buyer is going to like the kind of carpet I put in? Chances are greater that the buyer’s taste and my tastes will NOT agree! I have a friend who spent weeks, and weeks painting every room in her house before putting it on the market. Once they found a buyer, they learned that they buyer hated the colors on the walls and wanted the sellers to move out a week earlier to allow time to re-paint. Talk about a let down!