When selling a house, don’t underestimate the value of upgrades to a home. It is always a big question, do you upgrade your home prior to sale or just sell as is? Here is a tale of three homes. Just like Goldilocks, my buyer found which one was just right – but why is what all sellers want to know.
Even though all buyers have different tastes, a prevailing idea is the less work and more upgrades, the more people will spend and the fastest it will sell. I recently saw three identical homes in the same neighborhood with a buyer client. Same floor plan. All three homes were clean and well-kept.
House 1 was move in ready. It had warm updated colors on the walls, nice furniture, updated light fixtures, hardwood floors, stainless appliances, tile backsplash, nice blinds, nice carpeting and tile. Lovely decorations.
House 2 was not move in ready, but offered a blank slate. Everything was neutral, but colors were warm. Cabinets, counters, carpeting, tile. Basic, but buyers could easily add new tile, backsplash, nice colors and make this home their own. There was sparse furniture in the home, basic college level stuff – no décor.
House 3 was dated. Furniture was dated. Lace curtains and collectibles everywhere. Colors were pastel (pepto bismol pink) on the carpeting, tile and cabinets were white and neutral, as were the appliances. Mirrors on the walls. Lighting was minimal and dated (polished brass). However, house 3 was slightly larger and had several features like a water view, fireplace and walk out basement.
Buyer reaction to House 1 was pure excitement. They loved everything. They wouldn’t have to change anything to live there, just move their things in. They loved the colors, the décor, the upgrades…everything. And even though the furniture and decorations where not staying, they loved it.
Buyer reaction to House 2 was ok. They were not in love but said it was not bad. They saw the potential of the home and how with a little effort, it could be something. House 2 was significantly lower in price.
Buyer reaction to House 3 was nothing but negative. They spent much less time in the home and hated everything. All they could see was how much work would be involved and were distracted by the amount of work would have to be done to get it to their taste. House 3 and 1 were the same price.
House 1 and 3 were identical in price. House 2 was $25k less. From a pure numbers point of view, House 1 and 2 would have been the same price. House 3 would have been more. So because house 1 is more appealing, it will get a higher price. House 2 will get the next best price. And House 3 will get the lowest price and take the longest to sell.
Sellers need to remember one thing. 10k in purchase price is equal to $50 per month in purchase price. So if a home is $20k more and needs no work, it only costs $100 more per month. The alternative is a renovation loan, which are sometimes hard to get, or $20k on credit cards, which a lot of people don’t want to do.
So, the answer to this seemingly fairytale story is that House 1 fits just right, will sell faster and for more – maybe even multiple offers (which actually happened). The question is does your home appeal to buyers? Are you House 1, house 2 or house 3?