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Suzanne Penl…, Real Estate Pro in Clemmons, NC

I'am selling an older home - the kitchen and the bathrooms need to be updated - is it better to just lower the price or to offer a $ amount

Asked by Suzanne Penland, Clemmons, NC Thu Apr 29, 2010

incentive to help with the upgrades?

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I am told I am not a normal buyer. However, I would prefer a house with all kinds of out-dates. To me updates are ugly and worthless. I do NOT want granite. I do NOT want stainless (unless painted). I do not want all the useless pretty crap that costs far to much money.

I want a nice solid energy efficient house that is not a show place but is cheap enough to afford easier.

Besides, you spend $10k on a kitchen and bath and the sales price only goes up $8,500. That loses money for a seller.I know some sellers used to think you spend $10k on updating a kitchen and add $15k to the price. It would never have sold to me. I prefer formica, I prefer the stuff that realtors say buyers hate. You never knwo who will buy what and what they will dislike that you did trying to make it more appealing.
0 votes Thank Flag Link Thu Apr 29, 2010
Hello Suzanne:
While home value remodel estimators exist, and a web link is included below, the problem is that they use averages. The home you are selling is personal and individual. What is the best advice on one home may not be the best advice on another.
There is no simple, obvious answer to this initial question.
I suggest, if you are willing, to reconsider the question and open it up to the bigger picture. What is the best thing you can do to positively influence the marketing of the home? This is an analysis that involves data, market intelligence, and wisdom.
Is the advertising great?
Is the home merchandised (staged) in a way that is pleasing to the consumers?
For homes that have sold recently that are comparable to yours, have they had incentives advertized?
What are the competing homes like? And, how does your offering stack up against the others?
Lots of questions like these come into play.
So, shifting from the single question about updating to thinking about how you approach the situation may be helpful to you and get you the end result you are seeking for your client!
What will get your client's offering ahead of the inventory of competing or alternative homes.
Happy selling!
0 votes Thank Flag Link Thu Apr 29, 2010
Hi Suzanne,
Doing any kind of updating or remodeling before your sale depends on your time line as well as how the other homes that you will be directly competing with look. If they are primarily newer updated homes, than you might consider doing some minor updates that will not break the bank. In the bathrooms, If you have wallpaper and lots of decorations, I would remove all clutter, wallpaper and paint the walls a nice neutral color. If you have a vanity with cabinets, give them a fresh coat of paint. For the kitchen, which is one of the main rooms that can sell a house, this is where if you have time or money you might consider doing a minor update with counter tops, new stainless steel appliances (popular here in Portland, OR)and flooring. Decluttering goes a very long way in making a home look neat and is often underestimated. I would look at the homes on the market and see if you need minor updates or major ones. I would recommend pricing the house accordinly as opposed to offering a dollar amount for updates. I see that frequently with Sellers offering a "carpet allowance", but many buyers can't get past that green stained carpet and will put a higher dollar amount on replacment then if they were replaced before the sale. Here is an an excerpt from the Realtor magazines 2009-10 Cost vs Value report.

"Additional data prove the value of restraint. Upgrading kitchens and baths is still a smart bet. However, home owners will recoup the greatest share of their costs by foregoing super-deluxe projects in favor of mid-range kitchen and bath remodels. A mid-range kitchen remodel brings an average 72.1 percent return on investment, while an upscale kitchen re-do returns only an average of 63.2 percent of the money invested. A mid-range bathroom project has an average 71 percent cost recovery, but the average recovery on an upscale bathroom project is nearly 10 points lower, at 61.6 percent"
Hope this helps and good all the best in the sale of your home,

Cindy Westfall
Prudential NW Properties
5 Centerpointe Dr. ste 150
Lake Oswego, OR 97035
cwestfall@prunw.com
0 votes Thank Flag Link Thu Apr 29, 2010
Suzanne,
Credits back to buyers can create difficulties with some mortgages. You'd hate to get to closing only to have the financing blow up on you. You may be best off with some honest advertising, "Bring your imagination to see how great this kitchen & baths could be" and a bargain price. Connect with a lender who is experienced with FHA 206k Rehab loans to show some examples of how that can work for the right buyer.
I hope you get it sold quickly.
0 votes Thank Flag Link Thu Apr 29, 2010
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