On Your Mark, Get Set, Sell!
If you’ve lived in your home for more than five years you don’t know what it looks like, particularly to a home buyer.
That’s a bold statement, so let me explain. It’s in no way intended to be a criticism. It’s merely a statement of fact. Just like the family photos that hang on the wall, after time goes by, you stop noticing those treasured items. Now I’m not suggesting that taking down the family portraits constitutes market prep, although it could be a good start.
If you’re planning on selling your home, professional assistance will put you way ahead of your competition and you’ll pad your wallet as well. Here’s the best approach for getting your house ready to sell. The money you put into the home prep work as an investment and not an expense. There are at least two great reasons that this works. Let’s say right now your house is legitimately worth $250,000 on the market. But if you invested $15,000 in updates, you could reasonably price the house at $275,000. That would be a nice return on that $15K. However, it gets even better for you.
At today’s mortgage rates the principal and interest payment on $1,000 of borrowed funds is $5.40 per month for a 30-year fixed mortgage. That means it would cost the buyer an additional $135 per month to buy the $275,000 versus the $250,000 version of your home. If the buyer bought the home for $250,000 and then put in $15,000 in those same upgrades it would take almost 10 years to save back the $15,000. And they would need to stay there for the full 10 years to save it back. How likely is that? And they’d have to have the $15,000 and be willing to do it.
Buyers want to buy a property in which the updates have been already been done because those costs are in the monthly payment and not cash. Yes, the buyer must be able to qualify for the additional mortgage money, but I’m not seeing that to be a problem.
Doing the improvements flat out increases the marketability and salability of your house. The better a house shows faster it will sell and sell at a higher price.
Having said all that, there’s a possible pitfall. It’s easy to put money into things that will show you no return. A real estate pro knows what the market will respond to and what it won’t. Get some help from someone who’s active in the real estate market to guide you.
Another valuable asset is the services of a professional stager. We want the buyers to see the house with them inside, not you. Professional stagers are a great an investment. They also have great advice about colors for new paint, carpeting and other improvements and access to items that will enhance the appearance of your property.
Its cliché to say, “You never get a second chance to make a first impression.” It’s also happens to be true. If you’re going to sell your house, you’ll be subjected to trial by the market and the market shows little mercy for those unprepared.
photo by Earl Richardson