Fix that home for sale up or give an allowance

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Real Estate Agent with Keller Williams Realty 0575737

PainterA question asked quite a bit by home sellers is what improvements do I need to make my home ready for sale? Do I really need to change the carpet or will shampooing it do just as well? What about remodeling the kitchen and baths? That roof is about 15 years old now and looking a little worn, couldn't I just give an allowance? Besides if I give an allowance, say for carpet, then the new buyer will get to pick out the colors they like.

There are two answers to what homeowners should do about deferred maintenance on their house prior to selling. And each answer comes down to how much money do you want to net? Fresh carpet and paint for the cost of the materials and labor will always net you more than if you give an allowance. To NOT do the maintenance and give an allowance will give you less net on the house, but it does provide you the CONVENIENCE to get the heck away from that dog.

So with homeowners it is all about what is most important to them. Deferred maintenance comes back to bite you with energy, time and money. So it's really a case of pay me now or pay me later.

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Rainer
10,731
douglas moore
Alain Pinel Realtors - Walnut Creek, CA

Gary-

So true.  I would add that sometimes it can be a good idea to go ahead and perform 3-4 of the basic inspections and get the work done and cleared before buyers even get to thinking about all the credits they plan on getting from you.  Getting the work done also helps significantly when the home is compared to others that are also for sale.  Thanks.

Nov 24, 2007 05:58 PM #1
Rainer
3,836
Paula Paquin
Exit realty Optimum - Halifax, NS

So True Gary ~

Paint is dollars in the can

and

Thousands on the wall !

Nov 24, 2007 06:08 PM #2
Rainer
208,738
Marc Grossman
Marc It Sold! - Longwood, FL
GRI, Greater Orlando Real Estate Broker
In a different time I might say that some allowances work, but with so many homes on the market and many ready to move in to, I do not see allowances being a benefit.  Get it done before putting it on the market.  Otherwise, you're going to lose time and money.
Nov 24, 2007 06:33 PM #3
Ambassador
386,175
Tracy Santrock
Fonville Morisey/Santrock Realty Group, Inc. - Cary, NC
Raleigh - Cary Realtor
I feel there are certain items that should be fixed - paint and carpet are the major items.  Other items should be left alone and the home priced to sell - that will attract the buyers.
Nov 24, 2007 06:35 PM #4
Rainmaker
640,198
Marchel Peterson
Results Realty - Spring, TX
Spring TX Real Estate E-Pro
Gary, I could not agree more.  It is so hard to get seller's to understand that though.  When the paint and carpet are fresh it makes the home so much easier to sell; so many people want a home they can just move in to without having to do a thing.
Nov 24, 2007 07:12 PM #5
Rainer
117,927
Erin Stumpf (Attardi)
Dunnigan Realtors - Sacramento, CA
916-342-1372 / DRE# 01706589 Sacramento, CA
I totally agree with you...unfortunately it seems many sellers these days are a little cash poor, and do not want the trouble of putting in new carpet and paint in advance.  Good negotiating chip for buyers though.
Nov 24, 2007 08:05 PM #6
Rainmaker
178,300
Robert McArtor
RE/MAX Components - Fallston Maryland - Bel Air, MD
Top Listing Agent for Baltimore and Harford County
Your singing my tune. Allowances are alot easier to deal with than they type of carpet, color, etc. they Buyer wants. Just throw an allowance at it and call it a day!
Nov 24, 2007 08:14 PM #7
Rainer
68,895
Charlotte Home Loans Your Charlotte Mortgage Lender
Charlotte, NC
They say you never get a second chance for a first impression. When people walk in and see a home, they are either adding to or subtracting from the percieved value with everything they see. Give them the reasons to add up a bigger price tag than what you are asking and you will net better results. Great post!
Nov 24, 2007 08:21 PM #8
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Kate Elim
Dockside Realty - Spotsylvania, VA
Realtor 540-226-1964, Selling Homes & Land at LA

Gary...Unfortunately, the same holds true for my own home.  There's always some work to be done, even on newer, low maintenance homes.

Good topic.

Cheers, Kathleen

Nov 24, 2007 10:36 PM #9
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Gary Woltal
Keller Williams Realty - Flower Mound, TX
Assoc. Broker Realtor SFR Dallas Ft. Worth

Maintenance seems to always be a situation of finding the time and money to do it. Where do you put that on your calendar with the many other things you do? Kind of like auto repairs. They have to be done, but scheduling them is always so inconvenient. That's another reality of homeownership, low maintenance version or not, there's still a minimal amount you have to do. And things like roofs, water heaters, and air conditioners are like tires on a car. It's just a matter of time before they need work on them.

But those buyers do like houses in move-in ready shape, that's for sure!

Nov 24, 2007 10:56 PM #10
Rainmaker
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Roberta LaRocca
Simply Vegas Real Estate - Las Vegas, NV
REALTORĀ®, Broker, Salesperson, Property Management
Gary, Lots of buyers, especially in this market, want move in condition. 
Nov 25, 2007 12:40 AM #11
Rainer
33,760
Jennifer Hartwick
Coldwell Banker Tatie Payne, Inc. - Columbia, MO
I read above two words that struck a cord, defered maintainence.  Sometimes it amazes me how long people will let problems go before they address them.  I guess they don't really see it as a problem.  I spent the weekend at my inlaws house, which can always be a little nervy.  They asked me to give them an overview of items they should address before listing there house.  Seriously, their house needs so much work, I don't even know where to begin.  And paint/carpet aren't going to do the trick.  It is cabinets that are falling apart, parts of the ceiling are coming down and it needs to be cleaned so bad!  Thankfully I live 3 hours away!
Nov 25, 2007 01:47 AM #12
Rainmaker
105,364
Martin Abeshaus
First SEO Corp - Burlington, MA

Gary,

Besides coming down to 'How much money do you want to net', I think that the question also comes down to how much time do you have.  If they are looking to sell in a very short period of time, then it doesn't matter how old the kitchen is, it would be difficult to really make the changes necessary in a short period of time.  If they have the time, then maybe they should redo the kitchen.  The seller needs to prioritize based on both 'net' and 'time'. 

They should also be looking at what will make the biggest change for the least time and money.  As Paula said, paint is dollars in the can and thousands on the wall.  When we moved, we bought a few yards of good mulch and put it all around the house.  It was very inexpensive, didn't take much time and made a huge difference in first impressions. 

Nov 25, 2007 08:52 AM #13
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Gary Woltal
Keller Williams Realty - Flower Mound, TX
Assoc. Broker Realtor SFR Dallas Ft. Worth

Martin: Very good point at looking at money and time. That's what I was calling the convenience factor. Some sellers don't care about the highest net. They just want to move out even if it costs them more in the long run. Your idea on the mulch was excellent. Sometimes spending just a "little" reaps big returns (if they have the time!)

The reason I brought up TWO answers is many Realtors almost demand their clients fix things up ALWAYS. To some clients that just does not fit into where they are in life and they need to go down another path but know its consequences.

Nov 25, 2007 09:12 AM #14
Anonymous
Anonymous
Anonymous
Gary-This is a very timely post for me personally.  Thank you!  We just listed our own home and I'll tell you, I find myself nit picking everything in my path and wondering if there is more we should be doing or if we should just let the buyers negotiate.  I'm finding that being a seller isn't all that simple. 
Nov 25, 2007 10:04 AM #15
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Patricia Kennedy
Evers & Company Real Estate, Inc. - Washington, DC
For Your Home in the Capital
Gary, I'm on my way to a listing appointment for a house that is going to involve some of these issues.  In most cases, the prospective buyer will want to subtract far more than the cost of doing the repairs.  Great post. 
Nov 25, 2007 10:39 AM #16
Rainer
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Tyghre Collentine
Coldwell Banker Burnet - Minneapolis, MN
Great post...there's nothing unclear about it.  Sellers have to be willing to pay for the maintenance before the sale, or be willing to leave money on the table when it comes to closing.  
Nov 25, 2007 04:09 PM #17
Rainer
78,917
Linda Sticklin
Home Staging & Organizing - Berwyn, PA
I say fix it up front. The majority of buyers are not interested in taking on a seller's neglected repair or replacement projects even if they are offered an "allowance." With a lot of inventory to choose from, the buyer is going to choose the house that looks the best and is priced right.  
Nov 26, 2007 08:01 AM #18
Rainer
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Jason Botelho
Keller Williams Utah Realtors - Saratoga Springs, UT
Good post Gary.  The problem these days, is that sellers do not have the cash to do it right! 
Nov 26, 2007 03:21 PM #19
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