Mike Rock, Granite Bay Luxury New Construction...For Less (Complete Design)

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Rainmaker
908,513
Annette Lawrence , Palm Harbor, FL 727-420-4041
ReMax Realtec Group - Palm Harbor, FL
Making FLORIDA Real Estate EZ

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.

Nov 12, 2015 12:07 AM
Rainmaker
2,488,872
Joe Petrowsky
Mortgage Consultant, Right Trac Financial Group, Inc. NMLS # 2709 - Manchester, CT
Your Mortgage Consultant for Life

Good morning Mike. I have never understood that someone would do a bunch of work on a home just before they want to sell instead of while they are living there and enjoying the improvements.

Nov 12, 2015 05:54 PM
Rainmaker
1,465,977
Michael Setunsky
Woodbridge, VA
Your Commercial Real Estate Link to Northern VA

Mike Rock 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.

Nov 12, 2015 01:41 AM
Rainmaker
924,040
Candice A. Donofrio
Next Wave RE Investments LLC Bullhead City AZ Commercial RE Broker - Fort Mohave, AZ
928-201-4BHC (4242) call/text

Fix it up, clean it up, starting from outside in. Buyers buy with their eyes.

Nov 12, 2015 12:19 AM
Rainmaker
1,429,516
Raymond E. Camp
Ontario, NY
Licensed Real Estate Salesperson Greater Rochester

The leaky pipes, roof, HVAC and broken steps yes. As their tastes might be tatally what someone else is looking for adjust the price.

Nov 12, 2015 12:06 AM
Rainmaker
4,334,938
Nina Hollander, Broker
Coldwell Banker Realty - Charlotte, NC
Your Greater Charlotte Realtor

Increasingly, I'm finding that people want turn-key homes and they are more inclined to pay more for one than take a discount and have to put in their own money and sweat equity.

Nov 12, 2015 07:46 PM
Ambassador
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Praful Thakkar
LAER Realty Partners - Andover, MA
Andover, MA: Andover Luxury Homes For Sale

Mike Rock if the seller fixes everything, it's easy to market the home at market value.

Discounting does not work - at least that's what my experience is!

Nov 12, 2015 02:26 PM
Ambassador
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Bob Crane
Woodland Management Service / Woodland Real Estate, EXP - Stevens Point, WI
Forestland Experts! 715-204-9671

Generally best to fix it yourself Mike most buyers will exaggerate the cost of fixing

Nov 12, 2015 11:56 AM
Rainmaker
2,442,558
Evelyn Johnston
Friends & Neighbors Real Estate - Elkhart, IN
The People You Know, Like and Trust!

If it is not in excellent condition the buyer will knock the price down. It is less expensive to fix most things and claim a great sales price.  In my opinion.

Nov 12, 2015 11:40 AM
Rainmaker
1,683,406
Larry Johnston
Broker, Friends & Neighbors Real Estate and Elkhart County Subdivisions, LLC - Elkhart, IN
Broker,Friends & Neighbors Real Estate, Elkhart,IN

If they can make the repairs, their profit could possibly be much greater.

Nov 12, 2015 11:12 AM
Rainmaker
2,224,167
Debbie Laity
Cedaredge Land Company - Cedaredge, CO
Your Real Estate Resource for Delta County, CO

It probably depends a bit on your market. In my area it would be wise to have the seller fix things so the property won't have any FHA or RD appraisal issues. That way the property is available to a larger number of buyers. 

Nov 12, 2015 10:27 AM
Rainmaker
611,619
David Gibson CNE, 719-304-4684 ~ Colorado Springs Relocation
Colorado Real Estate Advisers LLC - Colorado Springs, CO
Relocation, Luxury & Lifestyle residential

Mike,
If they don’t do the repairs it will greatly reduce their buyer pool. Buyers want move in ready.

Nov 12, 2015 09:01 AM
Rainmaker
2,193,530
Elizabeth Weintraub Sacramento Broker
Elizabeth Anne Weintraub, Broker - Sacramento, CA
Put 40 years of experience to work for you

Buyers will hit that price hard, more so than it would cost to fix it up. 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.

Nov 12, 2015 08:15 AM
Rainmaker
860,815
Jeff Pearl
RE/MAX Distinctive / LIC in VA - Lovettsville, VA
Full Service Full Time Realtor

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.

Nov 12, 2015 07:44 AM
Rainmaker
32,001
Amelia Robinette
NoVa House and Home - Frankly Realty - Falls Church, VA
Education, Innovation, Service

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.

Nov 12, 2015 06:21 AM
Rainmaker
219,363
Tina Parker
EXP Realty Canada Inc. - Halifax, NS
CNE, REDM, SRES, CSP Home Staging REALTOR, Halifax

I find typical buyers respond more favourably 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.  

Nov 12, 2015 04:55 AM
Rainmaker
4,799,651
Gabe Sanders
Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales - Stuart, FL
Stuart Florida Real Estate

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.

Nov 12, 2015 03:34 AM
Rainmaker
5,164,592
Joan Cox
House to Home, Inc. - Denver Real Estate - 720-231-6373 - Denver, CO
Denver Real Estate - Selling One Home at a Time

If the seller is willing and able, would definitely recommend the issues fixed.  Buyers always over-estimate what repairs will cost.  

Nov 12, 2015 02:51 AM
Rainmaker
3,986,000
William Feela
WHISPERING PINES REALTY - North Branch, MN
Realtor, Whispering Pines Realty 651-674-5999 No.

A home with no issues shows pride in ownership and fewer questions from buyers

Nov 12, 2015 01:43 AM
Rainmaker
175,514
Spirit Messingham
Tierra Antigua Realty - Tucson, AZ
Third Generation Full-Time Realtor® 520 471-6900

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.

Nov 12, 2015 12:22 AM
Rainer
97,766
Carol Wilson
Your $imple Home - Toronto, ON

There is fear out there about bad contractors.  Repairs that are done and look great provide relief to the buyer.  This is why the balance is weighted in favour of fixing up (in my opinion), and has a dollar value that "inflates" the discount if repairs are not done.

As for what repairs are must-do, as a stager my rules are

1. functionality of the essentials

2. replace ugly with beauty when the ugly would repulse the buyer (as opposed to merely disappointing them)

3. for the rest, do simple things (e.g., 2-3 flowers in a tiny pot) that will add sweetness or bring out the best of what is there.  "Dated, but nice" will sell better than "Dated".

Nov 15, 2015 04:09 AM
Rainer
258,237
Richard Robibero, e-Pro, ABR, SRS
Panorama R.E. Limited - Toronto, ON
Selling Your Home as if it were My Own!

It depends on the Seller. Some sellers refuse to sweep never mind undertake renovations.

Many of the older homes in our neighbourhood are priced based on building a new home on the property. One that is too fixed up may actually be harder to sell.

 

Nov 13, 2015 09:57 PM
Rainer
5,344
Dave Rosenfeld
Schulenburg Realty - Huntley, IL
Real Estate Broker serving the NW Suburbs--Chicago

That's a great question. But as I'm sure you can imagine, there is not a single right answer for everyone and every situation.

Alot will depend on the amount of equity the owner has in their home, the amount of disposable income they have to make the repairs, and how quickly they wish to sell their home.

Ideally, the answer to this question is almost always to fix up their home before selling. Not only will the owner almost always get at least as much as they paid for the repairs back in the form of an increased sell price, they will also be able to sell their home a whole lot faster.

Nov 13, 2015 01:02 AM
Rainer
247,300
Macy Babb ... North Georgia Realtor
Re/Max Around Atlanta Realtor - 404-234-6166 - Cartersville, GA
Realtor, SFR, HUD/REO Certified

Fixing It will always bring higher dollars...but I always say there is two prices for every home, one As Is and the after.  I could not Flip homes for a profit if there was only one price.  It just depends on the Sellers situation.

Nov 12, 2015 10:57 PM
Rainer
21,317
Michelle Buckman
Long & Foster - Washington, DC
Showing the Best Views in Metro DC

It really depends. How quickly do the sellers want the house on the market?  Does the owner want to take the time to do all the necessary repairs?  Will the sellers get the money back if they fix up the property, etc?  If the sellers want to get top dollar then they should do the repairs and deep cleaning.  

Nov 12, 2015 09:15 PM
Rainmaker
912,465
Troy Erickson AZ Realtor (602) 295-6807
Good Company Real Estate - Chandler, AZ
Your Chandler, Ahwatukee, and East Valley Realtor

Mike - Well repairing and replacing old are two separate things in my eyes. If the gold accents in the bathroom are still working, and the HVAC unit is old, but still functioning, then you are not talking about fixing something that is broken, or not working. You are talking about updating things so they have a longer life span for the new buyer.

With that said, I think it really depends on the seller and the buyer what the best tactic would be, and every transaction will be different.

Nov 12, 2015 02:45 PM
Ambassador
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Karen Fiddler, Broker/Owner
Karen Parsons-Fiddler, Broker 949-510-2395 - Mission Viejo, CA
Orange County & Lake Arrowhead, CA (949)510-2395

I probably would n't advise a client to put on a new roof, but many other things, yes. 

Nov 12, 2015 08:48 AM
Rainmaker
634,332
Kathleen Luiten
Resort and Second-Home Specialist - Princeville, HI
Kauai Luxury Ocean Home Sales

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.

Nov 12, 2015 07:16 AM
Rainmaker
2,669,173
Richie Alan Naggar
people first...then business Ran Right Realty - Riverside, CA
agent & author

Either way works and comes with its own sets of pain and pleasure. 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

Nov 12, 2015 03:58 AM
Rainmaker
212,705
Stefan Winter
Real Estate in IL & NV | Owner of Real Estate Web Tech | Daily Vlogger - Las Vegas, NV
Owner - Winter Group & Real Estate Web Tech

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. 

Nov 12, 2015 03:08 AM
Rainmaker
4,433,809
Gita Bantwal
RE/MAX Centre Realtors - Warwick, PA
REALTOR,ABR,CRS,SRES,GRI - Bucks County & Philadel

It depends on the item. Buyers usually discount some of these items.

Nov 12, 2015 02:16 AM
Rainmaker
4,212,846
Michael Jacobs
Pasadena, CA
Los Angeles Pasadena 818.516.4393

It depends(you knew that was coming, right?).  

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?

Nov 12, 2015 01:14 AM
Rainmaker
1,172,389
Sam Shueh
(408) 425-1601 - San Jose, CA
mba, cdpe, reopro, pe

Most realtors are willing to do that as condition to get someone sell their home. Often it is like first 4 hours free. Roof -get a quote or two. 

Nov 12, 2015 01:01 AM
Rainmaker
3,070,584
Tony and Suzanne Marriott, Associate Brokers
Serving the Greater Phoenix and Scottsdale Metropolitan Area - Scottsdale, AZ
Haven Express @ Keller Williams Arizona Realty

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.

Nov 12, 2015 12:27 AM