One of the difficult decisions for homeowners to make when thinking of selling their property is whether or not they should renovate. This can be a hard decision because they are not sure if they are going to make back the investment which is put into the property. Through years of experience consulting with owners on renovating their properties, I have observed that the end result has always been better. Here are three reasons why it is a good idea to renovate before you sell:
- Quicker sale
- Higher sale price
- Better net return on sale
Of the 22 properties I listed and sold within the past year August 2019- August 2020 the following marketing preparation items were performed. The most popular improvements were painting, landscaping and flooring.
- Painting 86%
- Landscaping 77% (of single family homes or vacant land)
- Flooring 59%
- Appliances 45%
- Kitchen 41%
- Fixtures 41%
- Bathroom(s) 36%
- Bathtub/Shower Refinishing 32%
The average days on market for these properties was 22 days with 100% of all the listings taken having sold. 3 of the properties did experience a price adjustment before they were able to receive an acceptable offer. The usual marketing preparation time was between 2-3 weeks from the time the renovation began to the time that the property was ready to be staged or photographed.
The reason why a renovated property sells quickly is because it is more attractive to prospective buyers. Buyers gravitate toward properties that catch the eye with a fresh look, appealing colors, or modern design. When they see a property that needs a lot of work or does not look well kept, they automatically think of the cost involved to renovate. They also may not have the time or energy to put into a fixer-upper.
Higher Sale Price
The average sold to list price ratio of the 22 properties sold was 99.71% and the median price was $755,000. It is usually the case that when a property presents well, more buyers are attracted to make the purchase. The reason is that many buyers do not have the time or resources in order to perform renovations for a new purchase, which means that if you have a move-in ready property, there is a larger pool of buyers for you to work with. When you attract more eligible buyers, this creates a competitive environment in which you can then possibly receive multiple offers and a higher sale price.
Better Net Return on Sale
All of the properties listed had a better net return on sale as a result of their preparations. The prospective buyers could see the value of the improvements made. Here are some concepts that might help achieve the look and feel you want for a property:
- Paint – Gives a property protection against weather and normal wear and tear. This also gives the impression that the property has been well-maintained. A fresh coat with an appealing color may further enhance the appeal.
- Landscaping – Allows a property to feel more open and spacious. Cutting down trees can enhance your view and removing bushes and plants from around the house will minimize the potential of insect infestation. Having a watered and manicured lawn gives the feeling of a vibrant living environment.
- Flooring – Being able to have a floor that is clean and new makes a prospective buyer aware that they are purchasing a property which they can comfortably move into with less work. The color of the floor can also make a difference in the type of furniture they might want to purchase for their new home and makes it easier for them to plan their transition.
- Appliances – Having stainless steel appliances or new appliances with attractive features adds to the modern look of your kitchen. This is where the bling can be seen and is one of the nice aspects of moving into a renovated home.
- Kitchen – Being able to have a new set of cabinets and countertops for a kitchen that might be 20+ years old is a good way of saying “welcome home” to a buyer. They can easily envision sharing family moments and enjoying home-cooked meals when there’s a kitchen that is new and inviting.
- Bathrooms – Although we may not spend as much quality time in a bathroom compared with other parts of a home, they are essential areas where we are refreshed. Having a clean and sanitized bathroom is very important to most people and it if requires changing out that worn vanity, older toilet, or modernizing a tub/shower, it may be worth it.
- Bathtub/Shower Refinishing – If there is one real simple fix to having a cleaner looking bathroom, it would be to refinish your tub/shower. Most tubs and showers accumulate mold and mildew over time. They can also get discolored. Refinishing a tub/shower is one way to get it looking shiny and new.