?

Log in

No account? Create an account

Previous Entry | Next Entry

There are three schools of thought on this topic. One is to do nothing, cross your fingers, and see what you get. In areas where the real estate market is hot, many home sellers opt for this solution, because they think buyers are so desperate that they’ll make an offer anyway. And while you may get an offer, you’ll definitely leave a lot of money on the table in the process.

The second school is to recognize that some items need to be replaced or repaired, and offer buyers a credit for those items as part of the deal. You’ve saved yourself the work, but not the money. This option can actually be worse than the first one, because you don’t know how much you would have gotten without offering the credit. Again, you’ll eventually get an offer, but you’re missing out on getting the best price for your house.

If getting the best price for your house is important to you, the only option is to take care of repairs and do the work to make your house shine (or have it done for you). Here’s why: When you sell your home with obvious repairs left undone or a credit as part of the offer, you’re sending a message to buyers that your home has not been well maintained. Now this may or may not be true, but that’s the message that’s sent. And that will drag down the value of your home to those making an offer.

If you go to the effort to make the fixes yourself, you send the message that your home is well maintained. And (this is big) you also upgrade the value of those items you just replaced because they’re new…New carpet, New roof, New hot water heater… “New” has a value to buyers—that’s why new homes cost more than resale.

Putting your own sweat equity into repairs, taking advantage of zero percent financing at the big box home improvement stores, and utilizing a handyman for certain repairs will help keep your costs in check. Be smart about how you make repairs, and be careful not to over-improve. Your efforts could result in getting thousands more for your home. Compare your time against the reward and you’ll see it’s time well spent.

Comments

stark0228
Feb. 17th, 2006 09:37 pm (UTC)
Just remember that your time is worth something. If spending $500 gets you $1000 in increased sale price, but it takes you a month of nights and weekends, is it worth it?
magicmarmot
Feb. 17th, 2006 10:02 pm (UTC)
It might if I like doing the work anyway.

But if I spend $5000 in materials on the front porch and it increases the sale value of the house by $50,000, is it worth it? I say hell yes.
lexinatrix
Feb. 17th, 2006 10:17 pm (UTC)
Yah, but calculating some opportunity cost along with that doesn't hurt. Even if you bill your time on the cheap, you may be surprised.

Take, for example, my motorcycle project. I bought the bike for $2k. I put another $2k+ (and as-yet-uncalculated hours over several months) into making it the best goddamned 1990 Ninja on the planet. I come to find that I could have waited 1 year, spent $4k more and had a brand-new bike with 2006 technology, in a silver paint job (which hasn't been seen on a stock bike in 15 years).

Was it worth it to save $4k? Uh, I don't know. On the one hand, I learned a crap-ton of information about rebuilding motorcycles. On the other I could have spent that time doing... something else and just forked over the cash for a new bike with absolutely zero problems. Right now the "OMG you idiot!" hand is slapping me around a lot.
ignusfaatus
Feb. 17th, 2006 10:40 pm (UTC)
ha ha! I can feel that. I have an ebay volvo that did me like just like that.

you dont have a bike recommendation for a short girl do you?
magicmarmot
Feb. 17th, 2006 10:52 pm (UTC)
Oooh! Ooooh!


a mini-bike.


Thank you, I'll be here all night.
lexinatrix
Feb. 17th, 2006 10:54 pm (UTC)
Buy one of mine? =) How short are we talking? I'm 5'3" myself. What kind of motorcyle are you looking for? Cruiser, sportbike? Daily commuter? Long-haul roadtripper?
magicmarmot
Feb. 17th, 2006 10:51 pm (UTC)
Well, if I consider the equivalent opportunity cost, it would probably be closest to assume that I'd be spending time working on a new place, either building it or modifying it to my needs.

I have spent a chunk of time in the past week or so researching options from finding an old warehouse or factory to looking at single-family homes with really big-ass garages to looking at land/lots that I could build on.

If I was willing to move at least an hour's drive away (Like let's say Owatonna), I could do it. I could even find residential lots of over a half-acre in the relatively metro area in the $200-250k range, and in one case I found a ten-acre parcel in a pretty decent location (Minnetrista) that was under $300k.

It seems unlikely that I'll be finding something to fit my budget in the really near future.
lexinatrix
Feb. 17th, 2006 10:57 pm (UTC)
Okay, so then I guess you're trying to determine if you should mod the house to suit your (interim) needs and stick it out, or patch it up and sell it off?

Besides the usual recommendations of bathroom and kitchen upgrades, I don't have much info on what gets you the most bang-for-your-buck.
magicmarmot
Feb. 17th, 2006 11:17 pm (UTC)
Fixing to sell, they actually recommend not remodeling kitchen and bathrooms because the ROI is slight (unless you do the work yourself). Exterior stuff leads the list, followed by painting and detailing the interior, new floor coverings, etc. Mechanicals (plumbing, heating, etc.) are at the bottom of the list.

Critical repairs (like a leaky roof) are necessary to disclose.

Latest Month

April 2012
S M T W T F S
1234567
891011121314
15161718192021
22232425262728
2930     

Tags

Page Summary

Powered by LiveJournal.com
Designed by Tiffany Chow