So today we're going to answer your question, "Do I need to update my home before I list it?"
So one question I get asked a lot, especially for my clients that have lived in their home for a while and now they are getting ready to sell their home, is if they need to upgrade their home before they list it and put in on the market.
In my experience and with the current market, usually the answer is no, but it does depend on the situation.
So the reason I usually advise my clients against doing a lot of upgrades before listing their home is if you spend $25,000 for a kitchen or bathroom remodel right before the home goes on the market, meaning you're not enjoying that remodel, and you're just doing it to sell your home, it likely isn't going to get the same value that you put into it because you're literally spending cash dollars and we can never guarantee what you're going to get out of the home when you sell.
Also, buyers rarely pay the same price that you spent for updating so a lot of times you'll have a delta or an amount that you won't be able to recover unless you are getting the work done at cost or a very steep discount. We also can't guarantee that the new buyer will like the color/material selections that you made so unless there's something wrong with the condition, I usually am hesitant to recommend updating for the sake of updating but there are those rare circumstances and we'll discuss that during the listing appointment.
So what I usually like to do when we meet is look at is what's already sold in your area, analyze what finish out it have, and we'll discuss where it sold at from a price point perspective. Then I compare that to where you're at and what your goals are and what you're trying to accomplish in regards to selling your home. We will also look at inventory levels and how many homes are available in your area which will be a factor in our strategy to market and sell your home.
For example, if your house is worth $350,000 as is, and your neighbors that are selling around you have the same level of upgrades and/or same condition as your home, then I'm going to recommend you just stay there and you go ahead and sell there because there may not be comps that support higher even if you spend money to make your home a lot nicer, because the rest of the homes around you are not being updated, but there are some exceptions to that, which I discuss when I meet with my clients.
Now on the flip side, if there are comps in the area that are higher and everyone that has updated their home is getting let's say $400,000 and you're at $350,000 based on your level of finish out and you want to dump some money in to try to get to the $400,000 by all means you can and we will discuss a specific strategy to update things that will give you your biggest bang for your buck.
However, what I usually recommend is unless it's a luxury property - luxury meaning $450,000 - $500,000 and above, I usually don't recommend spending the money updating to update. Prices have gone up on remodels and timelines are sometimes longer than they quote in real life so a lot of sellers end up trading time and money to update and spend more of both than they bargain for.
Now if something's broken, that's what I call a "condition" item that we may need to address so we'll discuss that next.
So for example, if the carpet's stained, if there's holes in walls, if the kitchen countertops or bathroom vanity has a burn mark, or if there's chips on your cabinets, these are all examples of condition items that likely need to be addressed before we go to market with your home so we can put our best foot forward.
But if you're truly like, "Hey Stephanie, my counter tops aren't granite, they're not the most up to date. My ceramic tile is 20 years old, but there's no cracks in it and everything's fine, do I need to update these items?" Generally speaking my answer will be no, because the money and time/effort you're going to invest up front may or may not come back to us in the sale of the home.
Upgrading Luxury Properties
Usually my clients aren't wanting to just spend money upfront, however, on luxury properties, meaning homes that are valued $450,000+, I do have times where we're selling a home that still has wallpaper, brass fixtures, and that hunter green from late 20-25 years ago. In these cases, sometimes to be able to be competitive, we will have to update because the challenge will be buyers will just spend a little bit more money to get a more updated home because they can afford to do so.
I've seen that happen time and time again in the higher price points. Buyers at the lower end will overlook some of the updates not being done, but in the luxury market they usually won't because they have the financial wherewithal to pay a bit more and get what they want. They also don't usually want to pay for a remodel themselves they would rather pay for a home that's already gone through that process.
Discuss Repairs/Updates During Listing Appointment
So the conversation really needs to be had during the listing appointment because we're going to be able to look at whats sold in your area, what condition and upgrade level your home is at, and then we'll compare your home to the sold properties to put together a game plan.
That really helps guide us because what I don't want you to do is spend a lot of money on something when you would have sold anyway because of low inventory levels or you've got something really unique and positive about your home that causes it to sell regardless of the updates, and we'll take all that into consideration.
So it is one of those questions that it's going to depend on the situation, but chances are if you have taken good care of your home and it's just updating some items/rooms versus a lot of condition/repair items, I'm usually going to recommend not doing it just because we won't be able to get dollar for dollar when we sell.
I hope this answers your question of "Do I need to update my home before I list and put it on the market?", and for more home selling tips check out my post on What Happens When My Home Goes Active!