Preparing Your Home For Sale - A Seller's Dilemma
If you’re a homeowner interested in selling your house, most likely you’re already taking several factors into consideration, such as where you’re going to move, whether you want to downsize or upgrade, and if you want to hire a real estate agent to assist in the marketing of your current home. But the main question probably weighing most heavily on your mind is “How much is my current home worth?”
As a seller of course you want to do everything you can to maximize the amount of money your existing home can bring in, and how you achieve this depends on the type of situation and market you’re entering into. Obviously if you’re interested in selling to a developer who is only going to tear the house down you’re going to sell your home as is. And if you’re lucky enough to be in a seller’s market, most likely only minimal or cosmetic repairs (e.g., replacing worn carpets, fixing leaky faucets, painting touch-ups) are necessary to still bring in a buyer willing to pay your asking price.
Conversely, if you find yourself in a buyer’s market where fierce competition requires repairs to set your property apart from a crowded field, or you’re looking for ways to increase your asking price, you may want to consider investing in a remodel or redesign, including adding square footage to your existing home. Your immediate reaction, not surprisingly, may be that the normal preparations required to put your home up for sale are stressful enough without adding the headaches and costs involved with a remodel or addition. The potential financial upside, however, is something that deserves your attention.
If your home is worth $1 million but could be sold for $1.6 million after investing $200,000 in an upgrade, wouldn’t you do it? This is not a hypothetical scenario. As of this writing unimproved homes in the Los Angeles area that commonly sell for $1.5 million are going for as high as $3 million after being upgraded. The real estate industry thrives on the “added-value” philosophy. It’s why most realtors “stage” a house before selling it. Renovating your home offers an even greater opportunity to reap a higher price. This is, after all, how flippers make their living.
The possibility of making a substantial profit, however, doesn’t diminish the fact that undertaking a remodel project is a major decision and an intimidating one. The challenge is determining how much of an investment you need to make in order to benefit financially, and at the beginning of the process it can be difficult to know where to focus your time and energy. Apart from appraising the state of the current housing market, a good start is to tour homes similar to yours up for sale, preferably in the same neighborhood or surrounding area. Pay attention to the features and amenities those sellers are touting and where they have concentrated their remodeling dollars. If enough homes are showing a consistent trend in certain rooms or exteriors, you may want to consider following suit.
This is an exhausting, time-consuming process, and a great way to limit the burden you have to shoulder is to hire a broker with construction experience. Vision Realty specializes in this area, as broker Harvey Stern is also a licensed general contractor with over twenty years of experience. If you’re selling your home and are looking for an honest and thorough appraisal of what it may need to generate a larger profit, contact Harvey here or email him at email@example.com.
We all know preparing a home for sale is a stressful process whatever the situation and circumstance. Whether you decide to leave your house in its current state or embark on a remodel and/or addition it is imperative that you do your due diligence beforehand to make an informed decision, one that will ensure a sizable return on the effort you put forward.