When it’s time to sell your home or do renovations, there are several things to consider. One of the biggest considerations is how the updates will impact the value of your home. If you’re considering selling your home, it’s important to understand if you should update for re-sale purposes or try to sell your home as-is.
This question cannot be answered with a one-size-fits-all type of answer. Every situation is different. One home may only need a fresh coat of paint, a new front door, and a few minor repairs, while another home may need new flooring throughout, new kitchen cabinets and a full bathroom remodel. Here are a few tips to help you determine if updating for re-sale purposes is a good idea.
Talk to Your Real Estate Agent
Your real estate agent will be the one that knows best when it comes to updating for re-sale purposes. They can help you determine if a project is a good idea and what type of value you can expect to get when selling. Before you move forward with any renovations for selling your home, speak with your real estate agent.
Weigh the Cost of the Updates
A huge factor in updating your home for re-sale purposes will be the cost of updating. It’s important to weigh the cost compared to what your agent thinks you will gain in value. If it costs $10K to add new flooring to your home, but your agent believes you can sell the home for a higher price, it may be worth it.
Consider the Homebuyer
Most homebuyers are not looking for a fixer-upper. If they are, they want to buy at a significant discount so they can use the equity to fund the repairs. If you’re trying to sell your home for the highest possible price, you probably don’t want to market it as a fixer-upper. This means you will need to update the home.
You cannot expect a homebuyer to simply discount the price of your home by the amount of the repair, either. For example, if your home is worth $200K and it needs a new roof, which costs $20K, you cannot expect homebuyers to simply offer you $180K. They will not only need to pay for the repair but deal with the hassle of the repair. Instead, you may see offers of $160K or even less.
In addition, you must understand a buyer is taking a chance whenever they buy a home in need of repair. They could buy your home in need of a new roof and as the job is being done, they could find out the roof is in worse shape. This could lead to a higher cost than anticipated.
Updating for re-sale can be a big undertaking, but it can also be well worth it. Check with your real estate agent first and if updates are necessary, weigh the cost and the benefits before moving forward.
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