Thinking of selling your home and know your carpet, appliances, counter tops, etc. could benefit from updating and wondering if it’s best to do it now or to give an allowance on the selling price for these upgrades?
This is an age-old question faced by sellers: update or credit? There are dozens of ways to weigh the pros and cons of this dilemma. Some would have you do some complicated mathematical analyses to calculate whether the return on the investment it would cost you to update these items is worth it, compared to the assumed incremental marketing power of offering your home at a lower price.
I, for one, think that addressing these sorts of questions mathematically is impossible to do without taking on a significant number of error-prone assumptions. That’s because what does and doesn’t work with buyers is not necessarily logical or calculable, nor are some of the other factors you should account for as you make this decision. My suggestion is that you should consider replacing them now, but only after you get input from an expert local real estate agent or stager on your color, material and aesthetic choices.
Here are the three primary factors underlying my recommendation:
1. If you’re not yet 100 percent sure you’re selling, replacing them now allows you to enjoy the upgrades. So many sellers tend to make the upgrades and updates they’ve long dreamed of only when they’re planning to move, missing out on the ability to enjoy the home in its best shape… and that’s a shame. For that matter, it is not at all uncommon for home sellers to see their spruced-and-staged property and wonder why they decided to move in the first place!
In the interest of maximizing the enjoyment you get out of your home and your life now, you should at least consider updating these items if you can afford to, and enjoying them as long as you can before you do decide to sell the place, taking extra special care to live lightly on them in the interim.
2. Replacing them now might boost your home’s chance of selling more than a price discount. I do not exaggerate when I say that in many areas, today’s market is better for sellers than it has been for years. That said, there are still loads of short sales and foreclosures on the market that are priced aggressively low, many of which also need updating, and those are your competition. You might not be able to price your home low enough in comparison to these homes to make the discount for updating obvious to homebuyers who see your home and also visit the competition.
Additionally, when a home is in need of such updates, it may — simply put — show poorly. And the majority of buyers tend prefer homes that are move-in-ready. Some won’t even consider fixers, and I’ve even seen some die-hard amateur handypersons be tempted with the allure of a polished, freshly updated home (and the work-free weekends it promises).
If a few thousand dollars in basic updates and appliances makes the difference between your home showing like a fixer-upper and showing like a showplace, doing the updates before you list the place can be the difference between it selling at a discount or for top dollars, or in some instances the difference between it selling or not — period.
3. Replacing them yourself might be more cost-effective. Buyers almost always overestimate what things like carpet, paint and appliances will cost, so they might scoff at whatever you offer as too little, and request a bigger credit or discount than you had planned. On the other hand, if you have the items replaced yourself, you can be as aggressive as you want to be in terms of shopping around, getting deals, doing the painting yourself, hitting up the appliance outlets or calling in favors with any vendors or contractors you or your agent might know.
If the work is done well and the outcome is beautiful, depending on your local market dynamics, putting a well-prepared, updated home on the market may even position you to get more than one offer (and a better price, to boot).
There’s no single answer to this question and the correct answer will vary for every homeowner. Some may not have the money, or may be in a hot enough market that buyers bite on every listing. But my experience has led me to generally prefer putting a polished property on the market over a discounted cosmetic fixer every time.
If you, or someone you know is considering Buying or Selling a Home in Columbus, Ohio please contact The Opland Group. We offer professional real estate advice and look forward to helping you achieve your real estate goals!
The Opland Group Specializes in Real Estate Sales, New Home Sales, Luxury Home Sales, Short Sales in; Bexley Columbus Delaware Downtown Dublin Gahanna Grandview Heights Granville Grove City Groveport Hilliard Lewis Center New Albany Pickerington Polaris Powell Upper Arlington Westerville Worthington