Let's say pipes are not leaky, the roof is not new by can leak any winter, HVAC unit is old, the bathroom has gold accent. Should the homeowners make these kinds of fixes or reflect the cost by lowering the price?
This question was asked in Active Rain today and here are some of the most interesting replies fellow real estate agents provided to the question.
Annette Lawrence, a REMAX agent from Palm Harbor, FL says the cost of updating will be 1/2 the discount that will eventually be negotiated. "This issue is most often decided by the availability of seller fixup dollars not based on the best 'Profit' practices," Lawrence replied.
"I have always found, that doing the clean-up/fix-up work before marketing the home gets the property sold more quickly and for a price that far exceeds the cost, says Ken Jones of Realty ONE Group from Glendale, AZ. He also said that people buy "eye candy." Consequently, if it "looks bad" in their mind, "it is bad."
Michael Setunsky of Woodbridge, VA says it depends "A buyer will usually try to discount the property more than the cost of the repairs/updates. In the interest of time, this could be beneficial to the homeowner
Spirit Messingham of Tierra Antigua Realty - Tucson, AZ
Every property "priced right" will sell. I close next week on a property in estate sale, from original owner who bought it in 1952. It looks like he has not updated anything since then either. Buyer agreed with me, saw the value. We made an offer, and found out there were 4 more in the 4 days it was listed. The seller didnt address or fix a thing, and we are under contract now for more than list price (used acceleration clause and beat out the other offers). That being said, when I take a listing I try to suggest minor things where i believe the seller will get the $ back, usually paint and caulk go a long way.
"Fix it up, clean it up, starting from outside in. Buyers buy with their eyes, writes Candice Donofrio of Fort Mohave, AZ.
Raymond Camp of Empire Realty Group - Webster, NY
The leaky pipes, roof, HVAC and broken steps yes. As their tastes might be tatally what someone else is looking for adjust the price.
Tina Parker of Century21 Trident Realty - Halifax, NS
I find typical buyers respond more favorably to move-in ready with everything fixed. With mortgage interest rates being so low, it's cheaper and smarter to buy a house completely finished and/or having all the large expensive updates completed. Otherwise, people will have to pay for those things through their monthly budget and at higher interest rates if they can't pay cash.
"Either way works and comes with its own sets of pain and pleasure," writes Richie Naggar of Ran Right Realty from Riverside, CA. "I once had a home where the built-in stove was toast. All people kept asking was if I would replace it. I realized that to take it out was the best approach. Second best? Put a sign on it answering the question," Naggar writes.
Gabe Sanders of Stuart, FL
I think it depends on your market, Mike. If buyers are willing to pay enough for the updated fixtures/etc. than yes it makes sense. If the sellers need to put thousands into the updates for hundreds in return, than it may be best to just let the home go for the lower price.
Pamela Seley of West Coast Realty Division - Temecula, CA
It depends on the seller's goals, as well as who the buyers for their home might be. If it is FHA loan buyers then the seller is going to have to make repairs at some point -- better sooner than later. As far as updates, again it depends. Sellers would need to know what choices to make that will appeal to buyers, and that's where a real estate professional can help.
Stefan Winter of Real Estate in IL & NV
I would say it depends, if it will add enough value for someone to pay the cost of fixing plus some I would have them fix it. If you only get half the money back, discount it. Also depends how much spare cash the seller has on hand.
Joan Cox of Denver, CO
If the seller is willing and able, would definitely recommend the issues fixed. Buyers always over-estimate what repairs will cost.
It depends on the goal of the homeowner how is selling his or her house, says Michael Jacobs of Coldwell Banker Residential Brokerage from Pasadena, CA. "What's the goal of the homeowner? Sell quickly at likely a bigger discount (buyers always overestimate the cost of repairs while sellers underestimate) or possibly maximize the net proceeds with a turnkey property?" writes Jacobs.
"Most realtors are willing to do those repairs as condition to get someone sell their home. Often it is like first 4 hours free. Regarding the roof - get a quote or two," replies Sam Shueh of Cupertino, CA.
Tony and Suzanne Marriott, Associate Brokers
In a perfect world the property will appeal to more buyers if it's move in ready than if it needs fixing, so the likelihood of a sales price that is higher than (the sale price without fixing plus the cost of repairs) is significant.
Buyers will hit that price hard, more so than it would cost to fix it up, says Elizabeth Weintraub from Sacramento, CA. "If the place is a dump, then price it as a dump and get rid of it. If it's not, then fix it up," Weintraub adds.
Jeff Pearl of RE/MAX Distinctive / LIC in VA - Leesburg, VA
Fix as much as possible. Buyers always overestimate how much repairs costs, and many buyers just don't want to move in and then start having to track down contractors to work on their house. But it can also depend on the sellers position. if they are netting $200,000.00 for example, they might also be happy netting $170,000.00 and letting the buyer do the work the way they want. Some buyers might pass on it, but others enjoy doing their own work.
Kathleen Luiten of Princeville, HI
Depends on the house and it's competition. In my market most of the big things like a new roof or new kichen don't pay off with a purchase price higher than what the seller will spend on them. But they can speed up the sale. I look for eyesores and address those, then whatever stands out as really dated. If those things can be changed without a high price tag it's usually worth it.
Amelia Robinette of Frankly Realty - Falls Church, VA
These are exactly the properties I LOVE to bring to my investors. Really depends on the seller. Do they want a cash investor offer or do they want to bring it to the open market? They'll lose about 25% of the market value going as-is to an investor, but they'll have zero hassle and their money very quickly. Plus no buyer agent and I discount my fee because I don't have to invest any dollars into marketing. Bottom line for my sellers is often a matter of less than 10% of full market value, so for many, that's worth not having to do anything. Don't even have to vacuum and you can leave dirty dishes in the sink.
What about you? Do you advice your clients to make repairs or discount the price of their house?