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Home in Less than Perfect Condition Attracts Less than Desirable Offers - 2008-07-20 |
Last week we talked about the three reasons any house won't sell. They are condition, marketing and pricing. This week we look more closely at the importance of your home's condition.
Begin by looking at things from the buyer's perspective. Every buyer
naturally wants to get the best deal possible. Many buyers today believe that prices are falling and that interest rates are likely to decline.
And because they are in no hurry, buyers won't even consider making an offer on your house unless it is in excellent condition.
The reality is this: if your home is on the market and it needs maintenance or even updates to modern standards, it will likely draw only low-ball offers from investors who are bottom-fishing.
So if you hope to get near maximum market value for your home, it needs to be in excellent condition. And how do I define "excellent condition"? Yours needs to be a house that is ready to move into with no upgrades needed, no repairs to be done, and no home improvement projects looming in the days ahead.
For example, all the systems of your house need to be brought up to modern standards. The wiring needs to be safe and adequate, the plumbing needs to work properly and with good pressure, the heating and A/C system needs to be in good operating condition and at least have a few years of life remaining. Your roof needs to be relatively new and look good from the street.
The best way to make sure these systems are in sellable condition is to have a comprehensive home inspection performed by a professional home inspector. Remember that your purchaser, if you are lucky enough to attract one, is going to have their own inspector come through later, so you might as well face the music now.
And don't try to justify failure to offer good condition by saying "Instead of replacing the plumbing now, I'll just lower the asking price by the amount it will cost." In today's market, the buyer doesn't need to take on a big project with all the attendant hassle. Because there are so many homes on the market that are already in great shape, your break-even offer of a slightly lowered price doesn't make sense.
Next, you must make sure that your home features a modern kitchen and bath. These two areas are critically important in the race to win a reasonable offer to purchase. But there is a trap here which you need to avoid.
First, you should know that improvements in these areas tend to be quite expensive. My house was built in 1938, and a comprehensive kitchen make-over would involve not only new countertops and cabinets, but also flooring, electrical, plumbing, ceramic tiling, lighting and appliances. In an older house, these costs can quickly become prohibitive. My advice, then, is to make sure, before you start that you will be able to finish the job. A partially completed renovation looks worse than no renovation at all.
Second, it is really easy to overspend in these areas. Why install a new kitchen faucet with only hot & cold water when you can buy one with six different spray heads and a built in cell phone with GPS? It's only money, and the salesman will assure you that buyers will love it.
The cure to this temptation is to acquaint yourself with your competition. Know what price range your house will likely bring once it is in good condition, then see what other homes in that same price range have to offer. Your job is not to offer perfection, but simply to beat the competition in your neighborhood and price bracket.
Finally, a word about getting your home ready to show.
Today, the hot new buzzword in the real estate industry is "staging," or the art of decorating and presenting a home to its best visual advantage.
While rookie agents think that proper staging is a new science, the successful real estate veteran has been "staging" houses since we all lived in caves. Staging is nothing more than removing the clutter of everyday living and painting a vision of blissful homeownership - whatever that means.
Ask more than one agent to tour your home and make recommendations on how to make the house more sell-able. Good agents will have no shortage of ideas for you to consider.
Rank their suggestions based on your own experience looking at homes which are already on the market. And remember that there are many ideas which give a big bang for the buck. One example is lighting.
For a relatively small investment, you can often get a big return with newer and brighter light fixtures.
In contrast, replacing your plumbing all the way to the street is completely invisible to the untrained eye, but will set you back thousands of dollars. Even so, it may have to be done.
One final consideration is market timing. You may be better off waiting to sell until the market improves.
If you are simply unable or unwilling to put your home into excellent condition prior to selling, you might be better off postponing your sale or leasing your home until the buyer's advantage diminishes over time.
Next Week: Things you can do to get your house ready for market.
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Upcoming Events
"EPA CERTIFIED RENOVATOR" TRAINING
Do You Work with Real Estate? You Must Be LEAD SAFE CERTIFIED as of April 22nd.
To all owners, realtors, investors, property managers, contractors, electricians, plumbers and painters. Do you ever engage in any level of renovation? If so, read this:
Any renovator, from owners to contractors, from plumbers to electricians to painters, who disturbs lead paint while working in a pre-1978 home, school or day care center, now must be Lead-Safe Certified. If you’re not, you can face tens of thousands of dollars in fines. Plus, you put the health of yourself, your workers and your customers at risk, which could result in lawsuits. One simple 8 hour class certifies you for five years. It’s that easy.
Since April 22, 2010, there are new Federal rules regarding how you perform any work that disturbs lead-based paint in homes, child-care facilities and schools built before 1978. You now must be EPA certified and follow specific work practices to prevent lead contamination.
Failure to follow the new rules can result in federal fines of up to $32,500 per day or up to 5 years in federal prison, or both. Don’t take a chance - it’s not worth it.
How To Become an EPA Certified Renovator:
In just one day, John Adams will teach you how to meet all EPA requirements and become an “EPA Certified Renovator.”
Don’t wait - register now! Click on “Seminars” and choose your day!
- Friday, September 10th at Suburban Plaza, 2643 North Decatur Road
and Church Street, Decatur , Lower Level, beneath Hancock Fabrics
8:30 A.M. to 5:30 P.M.
- Friday, September 17th at Suburban Plaza, 2643 North Decatur Road
and Church Street, Decatur , Lower Level, beneath Hancock Fabrics
8:30 A.M. to 5:30 P.M.
- Friday, September 24th at Suburban Plaza, 2643 North Decatur Road
and Church Street, Decatur , Lower Level, beneath Hancock Fabrics
8:30 A.M. to 5:30 P.M.
- Friday, October 1st at Suburban Plaza, 2643 North Decatur Road
and Church Street, Decatur , Lower Level, beneath Hancock Fabrics
8:30 A.M. to 5:30 P.M.
- Friday, October 8th at Suburban Plaza, 2643 North Decatur Road
and Church Street, Decatur , Lower Level, beneath Hancock Fabrics
8:30 A.M. to 5:30 P.M.
Total Course Cost: $295, includes exam and EPA-HUD 400 page manual
Space is limited to 20 participants.
Training services provided by Seagull Environmental Management Co, Inc.
Courses are approved for purposed of certification under Section 402 of TSCA for the Certified Renovator.
This course has been approved by the Georgia Real Estate Commission for 7 hours of Real Estate Continuing Education
For more information, call toll-free 888-373-0029
Click above on the "Seminars" button to register
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