Andrew Wetzel's Musings

July 14, 2017

Selling a “dated” listing? What should you do?

Filed under: Uncategorized — awetzel @ 1:25 PM

You have been “hired” to sell a house that is dated. Hmmm. Does it need updating or does it need repair? Some buyers may think they are the same thing! I want to focus on houses that need updating. I will say that there are some parallels between both “conditions” but that houses needing repairs probably have a smaller potential audience and their condition may impact how a lender and/ or municipality views them.

Some houses seem to sell over and over again while others stay off the market for many years. I wonder why some seem to keep coming on the market. Perhaps there is something that needs to be looked at? On the other hand, houses that change hands frequently tend to be more updated as each seller wants to attract interest and, generally speaking, most sales involve a property inspection and a municipal inspection so there are repeated processes to check how a house is doing.

Conversely, houses that are sold less frequently have fewer opportunities for third-party evaluation and may not be updated with the latest equipment, features or decorating ideas. For example, in my local area you will find many houses with wall-to-wall carpet (even shag carpet!), aluminum siding, paneling and dropped ceilings! Salesman flooded the area in the 1970’s and sold a ton of these “ready fixes” that became “staples”. The presence of any (or ALL!) of these “dates” a house and can send some buyers running away. Frankly, unless you like what you see, these old-time “upgrades” may be unappealing, difficult to change and/ or even hide issues that should have been addressed but were covered up. Given the current low interest rates, unless a buyer specifically wants to decorate a home to their own tastes or buy a house to “flip”, they may be more inclined to spend more (it typically costs about $5 per month for every $1000 borrowed) to get a house that needs little improving or has nothing to do before moving in.

On the seller side, what should they do? Some listing agents WILL come in with a list of suggestions to make a house more saleable. I have heard of agents asking sellers to upgrade kitchens and baths or even to add a powder room to get a house sold. I do agree that a house may have something that really needs to be addressed just to make it able to be sold and that requires an honest conversation. However, many have “things” that I suggest leaving alone unless and until feedback or actual interest elevates them to priority status worthy of discussion. The fact is that many sellers do what they think will help their house quicker and for more money without actually knowing what their eventual buyer really wants. Many over-estimate the “return” on their investment. If the goal is to make a profit on the “project”, you need to do it properly and look at realistic numbers to see if doing something is really worth the time and effort. Look at how “new construction” works:  they offer a base model and then discuss upgrades.

Ideally, houses should be priced for features and condition (the location cannot be changed so I am ignoring it here but it is obviously important). Buyers should evaluate houses in terms of the competition, its features/ condition and how it fits their needs/ wants. I firmly believe that a house is something a person/ family should “grow into” rather than “outgrowing it” as ‘closing costs” are very expensive! Aside from their perception about how a seller priced it, they need to consider how much to offer and whether to ask for specific repairs up front. It is always risky if not disingenuous to make an offer on a house already priced for its features and condition and then to ask for financial consideration arising from a property inspection that points out the obvious. Inspections should focus on what is not obvious during a showing as well as pointing out what a buyer and their agent did not know at the time.

The bottom line is that there is risk either way. I would rather trust my ability to talk with an agent who has an interested buyer to close a sale than have a seller spend money that may hurt a sale and cost them money they will not recover, possibly affecting their plans after selling.

HIRE WISELY!

 

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2 Comments »

  1. I could not ask for a more perfect introduction to working with a certified stager. A professional stager will take the burden of the awkward conversations off of the agents hands, they are by helping to keep the agent client relationship strong.
    When the seller chooses to make the updates and repairs they will usually spend about one dollar for every three dollars a buyer Factor in to lower their offer. The seller maintains the control of how much they want to make on the sale when they work with the right stager.
    Trained and experienced stagers know what buyers want. My company works with targeted data that makes the preferences and choices even more precise.
    Staging is a lot more than just furniture and accessories, decluttering and depersonalizing, if you find the right one.

    Like

    Comment by Charity — July 14, 2017 @ 1:50 PM | Reply

    • I agree that “staging” certainly has its place but the scope of my post was beyond staging. As with all-things-Real-Estate, there are many options that need to be explored as there are many things that waste time and money which is why I end my posts with HIRE WISELY!

      Like

      Comment by awetzel — July 14, 2017 @ 3:28 PM | Reply


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