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Elysekalani, Other/Just Looking in Philadelphia, PA

What % of the value of a house is it customary to spend to update the house before putting it on sale?

Asked by Elysekalani, Philadelphia, PA Sun Jun 19, 2011

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Around my region I have personally found the best upgrade is a new solid front door and a good garden day.
Low cost and a very high return and sets the mood for the rest of the home and allows for more of a "well, I can over look that" when it comes to the normal chips and scuffs inside.

Baring MAJOR issues and each client's individual financial ability and goals. I try not to suggest above 15% of value on very targeted projects.

But when done properly, on a well maintained home, a good coat of paint, and perhaps a new water heater or kitchen appliances, which tends to not cost more than $10,000 in upgrades.

Though I am not familiar with Philadelphia, The National Association of Realtors had a report on Cost vs Value which I found HIGHLY informative and backed my findings of front doors tends to make good returns (See attached link)
1 vote Thank Flag Link Mon Jun 20, 2011
We recommend being very careful about making improvements on a home prior to listing it for sale. This is something that shuldn't be based on percentages or guess work but need and means. The reality of doing work at this juncture is that it's very difficult to recognize a 100% return on your mone invested in upgrades.

There is so much that can be accomplished by organizing, cleaning, de-cluttering, painting, planting, repairing, etc. that doesn't require a major cash investment. This is probably the best place for you to begin. Curb appeal, kitchens, and bathrooms should be given special attention because of their importance to common buyers.

Please consider investing some inexpensive time sprucing things up before commiting to any major initiatives.

Good luck,

bill
1 vote Thank Flag Link Sun Jun 19, 2011
There are no customary %'s, oftentimes cosmetics such as fresh paint, sparkling clean, neat, clutter free, etc., may do the trick--if looking to sell, invite a few local agents from different realty companies and ask for a cma, comparative market analysis--get an idea of value, and ask the agents for their opinion as to what should done in order to prepare the property for the market...
1 vote Thank Flag Link Sun Jun 19, 2011
It all depends on the present condition of your home. Many homes don't require updates. I have discouraged clients from spending a lot of money updating areas that may not necessarly add to the value of the home. I have a good eye in assessing if the home needs any improvements. Many times offering a credit at closing is better than trying to put in new kitchens and baths.Good luck with your home sale. If you need a good Phil. referral let me know.
Gladys Viruet
0 votes Thank Flag Link Mon Jun 20, 2011
There's no "customary" percentage.

A house might be in great condition and need only minimal fixing-up. Let's say $3,500 for paint, minor repairs, etc. On a $100,000 house, that would be 3%. On a $300,000 house, that would be 1%.

On the other hand, a house might need moderate fixing-up. Let's say some work in the kitchen and bathrooms. A bit of landscaping. And painting and carpets. So, maybe $20,000. Now, I wouldn't put that much into a $100,000 property (see Gerard's comments). But that'd be 10% on a $200,000 property, but only 2.5% on a $500,000 property.

So: No customary percentage.

What you want to do is fix/correct any potential deal-killers. Don't fall for the rationale that "I don't know if I want to spend all that money on _______ when the buyers might not like what I selected." It your carpeting is ratty, replace it. If you've got 20 year old wallpaper, strip the wallpaper and paint the walls in an off-white or light beige. People are looking for properties in move-in condition. And they tend to greatly overestimate the cost of repairs.

After you've fixed the deal-killers, focus on a couple of items/areas to really make them "pop." So the entire property is fully acceptable--clean, workable, move-in condition--with a couple of areas that will really "wow" the buyers.

A home stager can give you some very good guidance on what to tackle.

Hope that helps.
0 votes Thank Flag Link Mon Jun 20, 2011
Don Tepper, Real Estate Pro in Burke, VA
MVP'08
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Adding to Jonathan here, my favorite "do" is the front door and the door jamb. Everyone looks down when entering a home and they see what can be a scuffed, chipped, disreputable door jamb-threshold. Replace it, paint it if it will make a better impression. And, if the basement is unfinished, painting it, walls and floor, can be worthwhile investment to sell. And, offer a home warranty, about $500, paid at closing and covers things that can breakdown for a year. Available from listing or buyer's agent and usually not always paid for by seller.
0 votes Thank Flag Link Mon Jun 20, 2011
Any answer so far has merit. But the market for a high-end home in a better than average market location might have buyers with means, support from employers, ability to upgrade and repair after closing. A lower end home with buyers doing it on FHA will need money to repair, down payment and closing costs. If the work needed is minimal, seller doing it will help the buyer get the FHA loan. Move-in condition versus in need of TLC and repair are major differences in a home. Fresh paint, floors, new windows, clean gutters, clean and neat are one thing. New roof, renovated kitchen and baths, new appliances, new furnace, central air, landscaping, tree trimming, are all nice for buyer but understandably a bonus and for seller to add them just to sell, unrealistic. Obviously it depends on what you start with as to condition to suggest any expenditure amount.
0 votes Thank Flag Link Mon Jun 20, 2011
The question is a good one, but there are two answers here and both have merit. It is best not to spend more than 10 or 15 percent to update a home, however!!!!!!!!! With the fickle buyers in today's market is it easier and less expensive to just price the home right and allow for cash allowances to the right buyers so that they can put the money to the upgrades they wish to have. simply put, lets take flooring, you feel the carpet should be replaced, lets say 1400 feet of it at say $3 a square foot, nice carpet plus say $500 to lay it, so we have here a cost $4700 okay so will say that in today's market they'll throw the installation in for free, so lets say $4200 still plus the tax and what ever else it will be slightly more, but then there is the mess before selling, moving stuff around and basically a week of sheer hell. Offer a flooring allowance of $3000 and the buyer is happy, because the buyer might have been thinking hard wood floors and would have ripped up the carpet just put down! You were going to resurface the kitchen counter, you put a lovely black granite down to go with the newly redone cabinets in white gloss, Counter was say $6500 and the new resurfaced cabinets another $1700 so you have $8300 in the Kitchen however the buyer had thoughts of gray Slate and light wood finish on the cabinets. Giving a $3500 allowance on the counter top and a $1000 cabinet allowances you saved again and they get what they want! So possibly selling the home as is with upgrade allowances at closing are a better perk!
0 votes Thank Flag Link Mon Jun 20, 2011
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