For Sale by Owner News and Articles
How Much Fix-Up Should I Do?
By Robert Irwin
I often get emails from "by owner" sellers wanting to know how extensive they should be fixing up their homes in search of a buyer. Most already know that "curb appeal," or the first impression, is critical. So they're planning on cutting the front lawn and trimming the bushes. But, beyond that, how much more should be attempted?
One recent inquiry indicated that the seller was planning on remodeling the kitchen to the tune of $35,000 which she described as a "modest makeover." She wanted to know if she could justify spending that much on a home she said had a market price of around $350,000.
The real question being asked, of course, is how much is really necessary in order to get a quick sale at a good price... and what becomes overkill?
NECESSARY WORK OR OVERKILL?
Most sellers tend to go one of two ways. In the first case the seller doesn't want to spend a dime, not even enough for a can of paint for the front entrance. "I've lived here for x number of years and it's been fine. Why should I spend any money on the next owner?"
The other attitude is diametrically different. This owner sees all the problems in the home that he's living in and put up with for years, and now believes they must be fixed in order to sell. "I managed with a broken sink for years, but no buyer would. I have to redo the kitchen in order to sell."
Of course, the true answer lies somewhere in between. My advice is to first do all the cosmetic work, the inexpensive stuff. That includes cleaning and painting. Then, once that's done, take a look and see what, if anything, will hold the home back from selling.
Usually the first thing that strikes the eye is an old worn carpet. Replace it. A new inexpensive carpet looks great for at least six months or longer and will help with the sale.
But, what about our friend who wants to spend $35,000 in the kitchen of a $350,000 house?
The rule with remodeling is that almost never will you get your money out, even in those areas such as kitchen and bath that yield the highest return. Further, spending 10 percent of the value of the home on a kitchen remodel in order to sell, makes no sense. It would be one thing if the owner was planning on living in and enjoying the home for some time. But, it's quite another to add $35,000 in improvements. Will she now be able to sell for $385,000? Probably not if the true market value is $350,000. Better to drop the price $10,000 or $15,000 giving the buyer a perceived bargain and let the next person worry about the kitchen.
What if the current kitchen is an old-fashioned eyesore? What if it inhibits selling the house?
Then do the minimum necessary. You can put in a new tile countertop for a few thousand dollars (much less than granite or Corian). New, modest priced appliances can cost a few thousand more. Have the cabinets refurbished and painted, not replaced. A colorful new linoleum floor can be spectacular as can some new lighting. The whole job should cost less than $10,000.
No, the kitchen won't be a showcase, but it will look neat, trim, modern and useable. And will contribute to the sale of the house. More important, our friend wouldn't have overspent for the price of her home.
Robert Irwin is the most prolific real estate writer in America having produced over 100 published books in the field. His TIPS & TRAPS McGraw-Hill series has sold well over a million copies and his FOR SALE BY OWNER KIT and FIND IT, BUY IT, FIX IT and other books have been strong sellers for Dearborn.
In addition Irwin writes a regular real estate column for The Wall Street Journal online and is introducing a new weekly column forOwners.com.
Irwin has sold his own property "by owner" and during over 30 years in the business has been a broker and consultant to lenders, agents, buyers and sellers.
He can be reached through his website RobertIrwin.com.