updated April 12, 2018
By Barry Kunselman | Porchlight Real Estate Group | 303.88.0588 | Contact Barry
To Get Top Dollar For Your Home You Need To Renovate
Every Denver Metro homeowner wants to get the maximum value when selling a home. But how do you ensure you get the best price? Should you renovate or sell as is?
I recently helped a seller renovate a 2 bedroom townhome in Lakewood. Sold as is we would have received $230K. With $7K investment into the carpet, laminate flooring and paint we received multiple offers. The highest offer came at $277K but we decided to take the offer for $265,500 because the buyer was willing to cover the cost if the appraisal came in low. 27% return on money.
Here are some things you should consider before deciding to renovate or sell as is:
Unless you absolutely have no money or you can't afford the mortgage payment and the home is going into foreclosure, I always recommend some updates before selling. Bankrate.com, the leading source for home mortgage data, recently published this article on how an FHA-insured Section 203(k) loan can be used to renovate your home. If you need funding for your home makeover, ask your realtor about your options.
Small projects can pay off big. New carpets and a fresh coat of paint do wonders to improve the appearance of a home and its overall appeal to buyers. I would never recommend redoing a kitchen & bathroom completely as this would be pricey and would not give 100% return on your investment.
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Before you ever spend a dollar or lift a hammer you have to evaluate if you and your family can handle a renovation. If you remain living in your home while you are renovating, then you will be faced with some level of chaos. Certain personality types do not do well with chaos. There will dust and displaced household items and unfinished walls, drywall, and flooring. What would you be willing to sacrifice to get your home move in ready?
WHY YOU NEED TO UPDATE
As a seller, you might think that the buyers would want to select his own carpet and decide on paint colors. They do. So why do you need to update?
90% of homebuyers are looking at homes online so it is incredibly important the photos of the home look good and accurately display the home. Your home cannot look like a dump if you want to get the best price for it. To make more money, you have to get it to a move-in ready condition. People need to see how it's going to look when they live there so make sure it's attractive and appealing.
Because most buyers are using the majority of their savings for the down payment they are more likely to pay more for a home that is move-in ready than purchase a home at a lower price and spend thousands of dollars fixing it up.
SET YOUR BUDGET
Establish the budget. As a realtor, I advise my selling clients on improvements and renovations that would maximize the home's appeal while working within the seller's home improvement budget.
I also offer to help hire contractors and monitor/oversee renovations. Majority of realtors do not offer this value-added service to home seller clients. I provide this service because the house will sell quicker and I enjoy it. It's fun to take an old outdated home and make it shine.
My clients trust me because I know the best people for the job. My contractors are affordable and reliable and not overpriced. If my clients were to find contractors online they are going to pay a premium for the contractor which will affect their bottom dollar.
Once the seller has established a budget, it is time to it is time to create a list of things that need updating and to find out approximately what those costs. This renovation checklist can help you get a clear picture and identify the areas that need work.
Maybe the house has not been painted in the last 10 years and there is the wallpaper on the walls, or the carpet looks frayed and dirty. Kitchen and bathrooms are make or break for buyers when touring a home. It is important not to overlook its condition. Since an up-to-date kitchen helps entice homebuyers, the money you spend in this space can usually be expected to find its way back into your wallet.
If there is not enough money to replace the carpet in the whole house we can put my seller's money into deep cleaning or update outdated light fixtures. My aim is to maximize the budget as best as I can. We want to make the home as turnkey as possible within the budget.
SET THE TIMELINE
Simple renovations and updates can run from 2 -to 3 weeks. If the seller is out of town I take photos of the work that has been done. The photos can be a wonderful way to show the steps the contractor did to complete the job which could help down the road. There may be some clues in these photos that show what could have gone wrong. It is also an excellent way to keep everyone honest and to keep the quality high. These are also wonderful memories for later.
Advice to Home Sellers:
Before selling your Denver Metro home, make sure you understand the current market conditions in your neighborhood by talking to a knowledgeable realtor. Look at the competition in your price range to see how they stack up against your home. Check with your realtor which renovations will give the most bang for your buck. Making the right decision about your renovation project will ensure that your home will attract more homebuyers and get you the best price.
Whether you plan on staying in your house for a few more years or intend to sell soon, it’s wise to know which home renovations will generate the best resale value—not all add as much home equity as you might expect. Take a look at the 10 remodeling projects with the best ROI in Denver.
If you’re thinking of selling, give me a call! I would love to help you get maximum value for your home. l know what will work the best for you and advise what repairs are necessary, given the state of the Denver Metro market. Call 303.887.0588 or email me at email@example.com.
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