Buyers pay premium for move-in-ready homes

Cost-effective improvements can boost appeal, generate above-asking offers

By Inman News Feed
Add Comment Add Comment | Comments: 0 | Posted Oct. 1, 2012

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Cost-effective improvements can boost appeal, generate above-asking offers

Dian Hymer
Inman News®

First impressions are lasting. Homebuyers and real estate agents remember what they see, not what you say your home will look like after you reduce the clutter, paint, and replace outdated floor coverings and light fixtures.

Most people don't have the ability to visualize how a home will look spruced up. If you show your home to prospective buyers or their agents before it's ready to show, you could lose out on a possible offer because they're turned off by the lack of appeal. It's often difficult to get someone back for a second look after you've made improvements.

One couple who'd been looking for a home that was big enough for their family heard that one of the largest homes in the neighborhood was coming on the market. They contacted the sellers and asked if they could look at the house before it went on the market. If they liked it, they could save the sellers the expense of preparing the house for sale.

The sellers agreed. The prospective buyers looked at the house but turned it down. They couldn't see past the dated décor.

The house went on the market months later. The interior was painted in decorator colors; old carpet was removed and the hardwood floors underneath were refinished; the overgrown yard was pruned and a new lawn was installed; and all the seller's belongings were moved out and the house was staged.

The house looked fabulous. It received multiple offers and sold for well above the asking price. Ironically, the couple who had seen the house before it was fixed up and passed on the opportunity were encouraged by a friend who attended the open house to take another look.

They did and ended up making an offer in competition. Unfortunately, another buyer made a better offer. The couple who first saw it lost out on an opportunity because they couldn't visualize the property's potential. This worked to the sellers' advantage because they netted much more on the sale than they would have if they'd sold it to the first buyers for the list price.

HOUSE HUNTING TIP: Many sellers resist the notion of fixing their house up for someone else. Although it's not a good idea to make major renovations just before selling a home, cost-effective cosmetic improvements can make your home more salable and could increase the amount you recoup when you sell.

Most sellers find the decluttering process tedious. The bonus of weeding out what you no longer want or need is that you don't have to pay to move these items. And, you're making your home easier to sell.

Some agents don't want to take time to help sellers prepare their home for a more profitable sale even though buyers pay more for a home that's in move-in condition. Ask your real estate agent how much your home might sell for in both its "as is" condition and after making cosmetic improvements. If you decide to prepare your home for an advantageous sale, use an agent who will assist you with this by prioritizing what should be done and helping you find people to complete the work.

It's not always possible for sellers to cosmetically update their homes before selling. The trade-off will be a lower sale price.

Recently, two similar listings sold in upscale Piedmont, Calif., near Oakland. The one that was prepared for sale sold way over the asking price with six offers. The other listing had a dated décor that made it difficult to see how the house could look. The price had to be reduced significantly before it sold.

THE CLOSING: Make sure if you are going to spruce up your home for sale that you don't show it before the work is done.

Dian Hymer, a real estate broker with more than 30 years' experience, is a nationally syndicated real estate columnist and author of "House Hunting: The Take-Along Workbook for Home Buyers" and "Starting Out, The Complete Home Buyer's Guide."

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