Consult expert before investing in upgrades
I've spent a lot of time and money doing exterior remodelling of my home, plus a sizeable remodel of the master bath. However, the rest of my home needs attention inside. The bath upstairs is dated. The kitchen is also dated. We have fairly new appliances, but the counters and cabinets probably need replacing. Should I fix up my home or try to sell it as is?
This is one of those questions where the answer depends on variables such as condition of competing inventory, and the likelihood of return on investment.
Do home buyers want fixer-uppers or fixed-up homes?
Some home buyers think they want to buy a fixer-upper but generally, these buyers are looking for a property that will only require light cosmetic repairs. Buyers who gravitate towards fixer-uppers are sometimes those who don't qualify for financing to buy a more expensive home in that neighbourhood or those who have the skills to do it themselves.
Most buyers are willing to do simple repairs, such as paint the walls, put in new carpeting or replace light fixtures. They typically don't want to rebuild a foundation or move walls.
Fixer-upper buyers usually try to discount the price of the home to allow for the repairs and, for the inconvenience, add a bit more. However, most fixer-uppers have been priced taking into account the repairs required. Say, a home is worth $1 million fixed up, but it needs a new roof. A new roof might cost $100,000.
A buyer most likely will not offer $900,000 for this home otherwise they could buy a similar home with a new roof for $1 million and not have to go through the hassle.
A buyer for this type of home might offer $825,000, or even less. In this scenario, a seller would be smarter to pay for a new roof and sell the home for $1 million.
Before fixing up your home
Smart sellers will weigh the cost of proposed improvements against the home's market value after the repairs or upgrades are completed. If an upgrade won't return the investment, such an improvement might not be warranted. Before you decide to lift the roof and install skylights in the master suite, realise that kitchens and baths carry the highest return.
Before deciding to make specific repairs, take an afternoon off and have your agent show you similar homes that are on the market in your area. Note the condition and amenities in those homes. Compare these homes to yours. If, for example, most of the homes on the market have upgraded kitchens, you could concentrate on fixing the kitchen.
This doesn't mean you need to buy designer appliances and tear out the cabinets but a minor kitchen remodel might be a good investment. Sometimes, a fresh coat of paint on the cabinets and new hardware can give your kitchen an all new look.
Here are some improvements to make before selling your home:
• Patch all holes and cracks in walls and ceilings
• Fix all broken appliances and AC systems
• Repair leaky faucets
• Replace worn carpeting
• Repaint dark or marred walls with a light-coloured neutral paint
• Replace broken windows
• Clean the roof, even give it one coat of paint if you can afford to
• Change outdated light fixtures and ceiling fans
• Replace old linens / window coverings
• Pay attention to kerb appeal.
A house that needs repairs tends to deliver a lower price, particularly if the repairs are obviously immediately necessary.
However, if the house is solid and functional and habitable — even if it may need updating in the not-too-distant future — you are more likely to achieve much nearer your asking price. You should consult a good real estate agent and do your research before investing in any significant upgrades.
• Heather Chilvers is among Coldwell Banker Bermuda Realty's leading sales representatives. She has been working in real estate for 27 years. If you have any questions, contact her at firstname.lastname@example.org or 332-1793. All questions will be treated in confidence. Read this article on Facebook: Ask Heather Real Estate