Denver Divorce and Real Estate Lawyer Blog. (Vol 1.48) December 4, 2014
By Craig Franklin Chambers Esq. 7851 S. Elati Street #204, Littleton, CO 80120
The Littleton Lawyer.
As a Denver lawyer and real estate broker, practicing divorce and real estate law in the Metro Denver area, including Littleton, Highlands Ranch, and the surrounding areas, including Roxborough, Chatfield, Ken Caryl, and Arapahoe, Douglas, and Jefferson County, I am often asked the question: How Much Fix-Up Should I Do to Sell My Home?
This is not a legal question, but it has legal and financial implications. As a real estate broker for over thirty years, my answeris that it depends on the market and on the condition of the home.
All real estate purchases are part emotional and part financial. The emotional buyer will buy the extraordinary home or will buy new. The unemotional investor buyer will buy the fix-up because he is buying equity. The fix-me-up houses are usually sold "As Is" and are severely discounted because of their condition. Most of us are in between and are willing to do some work on a home to make an average home our own.
The homes that have been redone usually sell right away, and could usually benefit from a little staging. De-cluttering the rooms, cleaning the windows, changing light-bulbs, etc. These changes do not necessarily add value to the home, but they make the home saleable and attractive. Homes like these are usually the easiest to sell.
The bigger problem is with the average home. The de-cluttering helps with these homes, too, but the home will not fetch the same price as the homes already renovated. And as a seller, you don't want to invest additional funds in a home you want sell, funds you may not get back out when the home closes.
In a reasonable market, if your pricing of the home considers the condition of the home based on recent comparables for the same area, same style, and similar condition, you will get offers. And the market will tell you if you are priced fairly. If you are priced too high, you will get few or no showings; if you are priced fairly, you will get offers within your range; and if you are priced too low, you will get multiple offers.
The problem is with the average home, if you redo the kitchen for resale it makes the bath look worse. If you redo the bath, the deck looks bad. You could spend thousands of dollars to make an average home competitive, but still not get the fix-up money out.
My best advice is to view similar homes for sale with a real estate professional before placing your home on the market. This is called "previewing" a home, and a good real estate broker will spend the time to show you these comparables so you can view the home as buyer would.
If the market remains strong, the buyers are likely to forgive a lot for deficiencies of the home just to jump back in the housing market. And you will get some feedback from the brokers who show your home. Unless the seller is extremely motivated or desperate to sell, it doesn't hurt to price the home a little high. And you can always come down on the price. The market will tell you if your price is in the proper range.