The first seller, we'll call him Tom, has a large two-story, 30-year old home. When he recently put it up for sale, he told me, "My house is in great shape just as it sits. In today's market, it'll sell in days!"

The second seller, we'll call her Sarah, has a similar home of about the same vintage. Only before she put her home up for sale, she put in a new deluxe kitchen including new cabinets and appliances, granite counter-tops and recessed lighting. She also upgraded both bathrooms in the home and re-landscaped her yard. After painting, it looked far better than it did when it was brand new!

The trouble is that neither of these homes sold, not within days, not weeks, not after two months--this even though the market was hot and nearby homes were "selling like hot cakes!"

When I talked with Tom, he was perplexed. "Why isn't it selling?" he asked. "I've lowered my price three times to below what comparables have sold for. And it still sits there."

When I talked with Sarah, she was equally puzzled. "I'm only asking what I put into the house. Can't buyers see the value, here?"

Both Tom and Sarah made classic mistakes when preparing their homes for sale. In Tom's case, he assumed that just because the market was strong, buyers would pay good money for a home that showed badly. (The carpet was dirty, the walls marked, there were cracks in the kitchen tile and on and on.)

Buyers, however, are savvy. They check out a lot of homes so they know what's out there. They immediately classified Tom's house as a "fixer." Yes, someone would buy it, but only at a deep discount.

On the other hand, Sarah was into overkill. She spent a fortune, well over $90,000, in fixing up her property. When she tried to get her money out, she found she had to price her home far and away above what other homes in the neighborhood were selling for. Buyers certainly recognized the quality of the work Sarah had done. But, they also realized her home was overbuilt by neighborhood standards. That meant when it came time to resell, they'd likewise have trouble getting out any money they spent buying in. Sarah had created a "white elephant."

The moral here is that to successfully sell your home for top dollar, you don't want it to look like a fixer, or a white elephant. You want it to look like it's in good shape, and appropriately priced for your neighborhood.

TIP

Every house that's more than a year old needs to be dressed up for selling. However, this normally does not involve spending a lot of money. Rather, it's painting the outside of the house and the inside rooms as well as cleaning carpets, windows, appliances and other features. Perking up the lawn, resurfacing the driveway and trimming the front shrubs also helps.

What usually does the trick is taking care of everything that's cosmetic. You're not trying to turn a sow's ear into a silk purse. You just want the home to look the best it can for what it is.

By the way, Tom called in a crew to paint and clean his home. It sold two weekends later. Sarah pulled hers off the market feeling she couldn't afford to take a loss on what she had put into it.