DH and I are in the process of selling our house. We had it on the market for 30 days (priced reasonably for a house with limited upgrades). We almost had an offer (within 5,000 of asking) but at the last minute they decided to offer on another house. We had another offer for full asking (we accepted) but the buyer couldn't make it work. We also had an offer from an investor for 15,000 lower than our asking. We didn't even counter because it was too low.
I only give the background because we were very close to getting our asking, as the house is.
Our house doesn't have the ever-so popular granite and our carpet is not the best. It has at least 3 areas of cat stains. The carpet really isn't that bad, it's just the pet stains. We've always been willing to give a carpet allowance. However, we're concerned the carpet is turning off potential buyers because they can't see beyond it.
We have taken the house off the market because we're leaving for 5 wks but will re-list when we return.
Now we're faced with some decisions before we re-list. We are willing to replace carpet and counter tops IF it will pay off.
My question: Do upgrades really pay off and help you sell your house for a higher price?
Just don't want to do the upgrades and STILL ask the same price that we almost received with NO upgrades.
Would love to hear from real estate agents and folks in the buying market.
Thank youThis message has been edited. Last edited by: Skyler,
You are from Southern California, and it looks like a big home. I will make the assumption that is from the 600.000-800,000 range, don't know how many Bedrooms you have or nothing. It looks to me that you are getting more or less the price that you want.
so, I wouldn't do anything at this point, if you don't sell it, then start by decluttering the house, It may not be the taste of many people
And no, clean your rugs professionally, they will deal with the stains. and see what happens.
And to answer your question. no you will not get back what you put in upgrades specially if you are moving now.
Unless your house is listed for $100,000 - $15,000 under list is a wonderful starting point.
People don't like allowances. They will take the allowance and still subtract twice from their offer. Have you had the carpet professionally cleaned and deodorized? That should pretty well take care of the stains.
Are you going to be away from all computers and communications for 5 weeks? If not - you being away and the cat being away is a wonderful opportunity to show your house without having to make an appointment.
I agree with rker - get rid of some of your stuff. You're planning to move - pack it up so you don't have to worry about it later.
If you can - post your listing because I'm exhausted by looking at all your "things" in the photos and not seeing your house.This message has been edited. Last edited by: Charming,
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Skyler, the short answer to your question is no, they don't payoff. (When the salesperson claims that a kitchen reno will "return" 70%, he/she means it will cost you at least 30%.)
OTOH, it depends how we calculate and/or what we classify as a "payoff". Upgrades do, in general, help you sell your home faster. So, if you're carrying your property for an extended period of time (let's say 6 months) and could save significant **$ by moving 4-5 months earlier, that may reimburse the cost of the upgrade and then some, resulting in a payoff.
In addition, if your home becomes known as a stale listing within your local market, you might be forced to repeatedly lower the asking price to encourage showings. Needless to say, any offer received in 6 months (or even more, for many stale listings) may be significantly less than what you consider market value. By upgrading your home to avoid the "stale listing" trap, you reduce your days on market and consequently receive another payoff by maximizing your market value.
It also depends on what you consider an "upgrade". Your home is a major asset. To many people, it is the most significant asset they'll own in their lifetime and the source of their retirement funds. When you sell a major asset, you must expect and factor in/budget for selling expenses.
Although I don't know the value of your home, as a professional, I would categorize the expense of both a professional carpet cleaner and carpet replacement (if necessary) in your situation as maintenance, a selling expense - not an upgrade.
WRT the countertops, the answer depends on the value of your home and the competition. And, as I mentioned above, it depends on how quickly you'd like to sell the home. I really can't opine without the listing information. Less expensive granite and other countertop options are available but they may not be appropriate for your home.
WRT the offers, an "almost" offer is not an offer, IMHO. Similarly, I wouldn't take my property off the market, losing valuable time during the primary selling season to work with an unqualified buyer. So, I wouldn't consider that an offer, either. Even though I don't know the value of your home, it sounds to me as if the investor made a reasonable opening offer and probably deserved a counter.
Have you staged the home? I only glanced at the two current photos. Although the rooms look lovely, most of the items in the photos s/b removed so that buyers can circulate around your home. (We call that "walking around room" in staging.)
We sell a home differently than we live in it. In our experience, most buyers need to remove 50% of their furniture and other items (that is, stuff) to properly stage a home. Buyers buy the square footage, not your personal items, so they need to get a sense of the space and believe there's sufficient room to move their own items into the home.
In addition, your personal items are just that - personal to you. Buyers need to see the home as their own. To you, it's now a piece of inventory. If you can (psychologically) let go of the home and set it up to appeal to buyers, I believe you'll be amazed at how quickly it sells.
Why are you taking the home off the market during the prime selling season, after (apparently) having some activity and receiving fairly serious buyer interest? During the months of July and August, families can still buy a home and move in prior to the new school year. Can a neighbor, friend, relative and/or your agent monitor the home during your absence?
I don't know many vacation areas where they can't contact you and/or fax documents, if necessary. Granted, you might need to return home at some point in order to complete the sale but again, this is a major asset. With all due respect, when you exit during the selling season and don't counter offers, many people, including your agent, might wonder if you truly want to sell.
If you're willing to receive more frank commentary, I suggest you post your MLS number and listing photos. You'll receive many helpful comments, if you do. We're don't bite - we're harmless, really!
I hope the above helps, somehow. It's not personal - I'm just explaining what happens in the real world and how others might view your situation.
Best of luck to you -This message has been edited. Last edited by: SurfNow,
Oh, I hadn't seen the other posts - sounds like we were on the same page!
Let us know what you plan to do, Skyler. As you can see, we'd all love to see your photos.
Take care -
Agree with other posters, pack up your personal collections to enhance your rooms. We've loved looking at your house over the years and all it's charm, but now you have to appeal to the buyer, not yourself. As a former Realtor, carpeting isn't an grade but a maintenance item. One can recarpet and give a whole new look to the house. It may not bring more money but it probably would hasten your selling process and get you to the beach sooner. And please don't take home off market. I sold many homes with all four parties in separate states via email and fax. Wireless is everywhere even in Canada, tho maybe not at your cottage. Good luck.
Thank you everyone for your replies. I appreciate hearing your opinions.
I should give a little more background to address some of your comments/questions. DH and I bought another place 7 yrs ago(retirement home at the beach). It's 1hr away from our current home and we've been traveling back and forth on weekends. We're tired of the travel and that's why we're selling our current house.
I actually forgot my tagline had my home there but those are very old pictures. We REALLY declutterd the house. We actually filled our three car garage with furniture and knick knacks that we pulled from the house, lol! Which brings me to why we removed the house.
We are going out of the country for 5 weeks, packing and preparing for an estate sale. It was just too much with also trying to show the house. We have an attic full of furniture and other items that we've collected over 22 yrs. It's now ALL over the house and folks really couldn't even walk around to see the house. We're also packing our things. The amount of people requesting to see the house slowed considerably so we figured we would take it off the market (due to the combination of factors above)and make some changes when we re-list. Either lower the price or make the upgrades (hundred thousand dollar question).
We've decided to have the estate sale and move permanently to our place at the beach and it will then be easier to show/sell the house when we return. It may not be the wisest way to go but this decision works for us.
We have had the carpet cleaned but unfortunately, the pet stains didn't come out We interviewed three real estate agents before listing and all three didn't think we needed to replace the carpet but I don't think they saw the pet stains. DH and I are probably being stupid about the carpet but we really believe it could be turning buyers off.
SurfNow, you brought up a great point about the competion! This is why we thought we might need to install granite. We had many showings (some came back twice) but it still didn't sell. Granted, there could be many reasons for that but we're wondering if the lack of upgrades contributed to that. Almost every house that
has sold (aside from short sales)has the granite. The EXACT same house as ours just sold for 12,000 more than our asking. It has a few other upgrades but not many.
Hindsight is 20/20 and perhaps we should have entertained the investor's offer. However, it was the first offer we received and it was only two days after we put the house on the market. We had an open house and our agent said they walked in 10 minutes after it began, said " we love the house and we will offer in the morning. You can just close the door and go home". We thought we should give the house a little more time on the market to see if we would get a better offer.
The house has already been taken off the market so I can't post the MSL number.
I really do appreciate all of your thoughts, you've given me a lot to think about.This message has been edited. Last edited by: Skyler,
Thanks for the background. It makes more sense. I would agree about keeping it off the market. In my area we are not so concerned about school schedules, many here are concerned about timing with our tourist season.
Once you have the house decluttered, take a good look at the walls, appliances, counters and carpets. It they all look tired and worn - then make a plan to freshen.
Before doing any work or putting it back on the market - walk through some of the competition with your agent and then walk through your house. Tell the agent to be brutally honest with you about the good and bad points of the competition and your house.
Easy for me to tell you this - but walk through your house with fresh eyes. Don't see your house, but as an unfamiliar house you might want to buy. I do that with our house and I have a whole laundry list of fixes and we are not even planning to sell!
Good luck and keep us posted.
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Thank you Charming, some great advice!
Good idea about walking through with fresh eyes. One thing I've learned through all of this….everyone doesn't love my house as much as I do, lol.
A few suggestions when you get ready to stage for listing photos.
1. Open up your windows. It looks like you have fabulous views from some of your rooms - sell it! Buyers will probably overlook the tile counter tops for your views.
2. If you have a great architectural feature - don't cover it - exploit it.
3. Keep the landscaping simple. Many buyers will look at a fussy yard and think of all the work. Before the gardeners swoop in and attack - I don't mean rip out all your plants etc. Just when you change seasons - simplify.
4. Not to do with staging but ask your agent to use a professional Real Estate photographer and take a look at their work before approving.
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Charming, funny you should mention the landscaping. I do believe that is another reason we didn't sell the house. My yard is very complicated! I used to do a lot of gardening before we bought our new place. Since traveling back and forth, I've let it go and it shows. We did spend 1,000 on landscaping before listing just to get rid of the overgrowth but I still think it needs more help. Plus, this is the WORST time for the yard because it's incredibly hot and it takes a beating. Water is SO expensive that I think potential buyers look at the yard and see nothing but dollar signs
I did take the window treatments down in the master bath because they were fussy and didn't show off the view. We do have a beautiful view of the lake and the mountains.
I really thought buyers would fall in love with the view and disregard the carpet and counters but that didn't happen. Well, aside from the investor who knew a gem when he saw it and thought he could walk away with a steal…I don't think so Can you tell I really didn't like
this investor and his low ball offer? You can replace counters and carpets but you can't replace a view.
It depends, but some upgrades do pay off:
Three times, we have significantly upgraded our homes and got back at least 100 percent of what we paid for the upgrades. In 2000, we bought a 1500 SF condo in DC for $181K, put in approx. $25K of upgrades and sold for $359K in 2003.
In 2002, we bought a 650 SF investment condo in DC for $72K; spent $8K on upgrading kitchen. Sold it for $159K in 2004.
In 2003, we bought a SFD home for $169K near Austin; spent approx. $70K on upgrades including a new kitchen and landscaping/hardscaping and sold it for $239K in 2006.
That, of course, was at the height of the real estate boom nationally, when it was a seller's market. In certain areas today, it is booming once again, and recovering 100 percent of upgrades can still happen, depending on the purchase price, the type of upgrade and the health of the local economy.
That said, recovering even 60 or 70 percent of upgrading a home is still a very enviable thing. As an owner, you had all that time to really enjoy your home and the upgrades. And, chances are, without the upgrades, the house would sell for much less, in a competitive market.
In our Central Texas area, the average DOM for upgraded resale homes is about 35 days and 90 days for "dated" homes, all things being equal.
Our comps show that a recently upgraded home can ask for -- and get -- a higher price per square foot than an upgraded home...this being an extremely competitive environment and sellers market.
Just a funny side note: I didn't sell the house but I got offers from a few different people who wanted to buy some things in the house. One wanted a mirror, another wanted my dining room table, couch, chair and coffee table and a third wanted to but the drapes, lol! Maybe I'll have better luck at the estate sale This message has been edited. Last edited by: Skyler,
There is one photo you have that I would keep or have the photographer recreate - the late afternoon photo of your dining room looking out towards the mountains. If that doesn't get potential buyers in the door, nothing will.
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aychihuahua, thank you for your input. You make some very good points. I forgot to mention that the market here is VERY competitive. Our area was hit very hard by the financial crisis and home prices fell dramatically. They've increased quite a bit within the past few yrs and it seems homeowners and investors are taking advantage of this. There are SOOOOO many homes for sale in our neighborhood, buyers have quite a selection. As I mentioned, most of the other houses have upgrades and I think we're losing buyers to those homes.
We thought if we priced the house low enough, it would make up for the lack of upgrades but that didn't happen. Maybe I'm crazy, but I have a different way of thinking. When we were house hunting for our new place we looked at places with and without upgrades. While we could afford the higher priced upgraded places, I specifically chose a lower priced non upgraded one. My thinking was that I wanted to be able to choose my own upgrades (type of flooring, counters etc) and not live with someone else's. If we bought a place that had new granite and nice flooring, I wouldn't be able to justify pulling it out just because I didn't like the color. However, the place we chose has crummy cabinets and floors, so I have no problem replacing it.
One thing I'm thinking is that perhaps people like to move into a house with upgrades because they don't want to go through the inconvenience of construction. Having to live with no kitchen for awhile is no fun. I guess that's a true benefit that I need to consider.
acchihuahua, wow, you really did get your investment back. I would just be happy if my upgrades sold the house faster and I broke even having done the upgrades.
I really appreciate hearing everyone's thoughts, thank you.
Thanks Charming, that's one of my favorites too. It's actually early morning and I woke up early to take it. We get incredible sunrises here and I wanted to capture it.
Thing is, we did get a lot of people through the door, just didn't get the offers.
Skyler, I apologize - during that part of my previous post, I was speaking about granite in another context. I sincerely doubt that the lack of granite is the reason your house hasn't sold.
In fact, it is extremely difficult to properly complete financial analysis of the proceeds of real estate sales and in particular, calculate the source of the funds.
If/when a seller previously installed say, 20K of upgrades, and later sold for 50K over their purchase price, it doesn't confirm that they received a return of 100% on their upgrade cost. Far more analysis of the proceeds is required to determine if that seller received anything at all as a result of that expenditure.
In my experience, market appreciation and/or depreciation typically accounts for the greatest portion of any profit or gain received, by far. In the examples given above, the poster/seller had 2-3 years to realize market gains or losses. RE can change rapidly, as we know, so that's many dog years in RE! And, the seller freely admits that these were boom years, in a sellers' market.
WRT the oft-quoted 60-70% return on kitchen upgrades, I have a difficult time understanding why anyone believes that a cost of 30-40% is a "return". In addition, upgrades are like cars - they begin depreciating as soon as they're driven off the lot, i.e. installed. So, unless you sell your home immediately after installing a kitchen, you'll receive less than 60-70%, depending on the age and condition of the kitchen. In addition, if you made poor material choices and your kitchen is taste-specific, you may receive much less than 60-70% even if you do sell immediately.
Why is it so difficult to analyze and compare RE proceeds and market values? Because, IMHO, RE assets are incredibly dissimilar. It is extremely rare to find 2 assets that are exactly alike, e.g. same model, same sq. footage, same lot size and configuration, same view, side of street/block, same upgrades over the years and so on ...
Let's take a quick example and make the unrealistic assumption that we have a few identical homes on the same block and also hold numerous, way too many factors constant. Home A did that 20K kitchen upgrade but it's now between 4 and 5 years old so worth about 5K. (I'm assuming a 5 yr depreciable life, common for these type of assets, rounding up for ease of calculations.)
Home B had no upgrades over the years and has a market value of 95K. Based on the 5K kitchen upgrade, we'll assign Home A a market value of 100K. The two homes list and Home A sells fairly quickly at its market value of 100K - it has that granite, right? (lol)
Home B sits on the market for about 6 months and sells for $99,750. Oops, what happened here? Well, during that 6 months, the market gained 10% per annum. So, Seller B rec'd 5% of appreciation.
Buyer A now has a home worth 105K, holding everything else constant. Seller A may have gained considerably, if he/she moved up to a higher priced home in the same area, gaining that same 5%. If they moved to a different, depreciating area - nope, not so much. But, what if their carrying costs in the new home are less than before? Ah, they're up again. See how many factors are in play, here?
Ok, let's consider Home C - again, same model, block, everything. They made that same 20K kitchen upgrade at about the same time as Home A. They listed the same time as the other 2 and naturally, believe their home's worth the same amount as Home A. So, they list at their market value estimate of 100K.
Oops, what happened here? Home C didn't sell for 100K right away. In fact, they haven't sold as a few months pass. Well, they blew it - their upgrades stink. (Nobody wants a black and purple psycheledic kitchen, even though the Home C sellers love it!) They reduce the price and reduce it again - until they're down to 95K, same as Home B in six months time.
Needless to say, Home B sells because at least the buyer can live with the original kitchen for a while and won't have to rip it out immediately. Home C continues sitting on the market, reducing their price even further and are at 90K in a year's time.
Ok, well what about the market value appreciation? Why isn't their listing price higher? Why didn't the market value changes save the Home C sellers?
Oops, the market reversed course, lost its previous gains and is now even after a year. So, after a year, the home w/o upgrades (Home B) is still worth 95K to its new owners. Home C, as a stale listing, finally sells for, drum roll, 87K.
The Home C buyers noticed all the price reductions, days on market and reduced the price a little more to compensate them for their time and trouble ripping out the black and purple kitchen!
So, anyway, hope you guys didn't mind my little example. You probably stopped reading, long ago, hahaha!
The moral of the story: upgrades don't necessarily make a difference and may even cost you, upgrade **$ differences are not that significant over time, market value appreciation usually trumps all and don't install black and purple in your kitchen!
Skyler, see my next, very succinct post if you care to hear MHO, that is - my best guess, of why I believe your home hasn't sold.
Thanks for reading, lol!This message has been edited. Last edited by: SurfNow,
Skyler, sorry about my digression. Mostly I just wanted to point out how upgrades depreciate over time and market value may bail you out!
You haven't mentioned potential buyer feedback. If your agent solicited comments, you probably didn't receive any honest ones, anyway.
As you noted above, the buyers probably can't see past the carpet and imagine the home with their own flooring selections. I agree but I don't believe that's the reason it didn't sell right away. (The investor's offer - well, that's another issue so we won't go there.)
I also don't believe it's the granite for a number of reasons. For one thing, although I didn't review your photo albums, it's been mentioned that your home has a lovely view. Usually, a view will trump many, many home defects, including an ugly kitchen.
BTW, I'm an animal (and cat) lover. If you gave everyone (or most people, anyway) who walked through your home truth serum, I suspect they'd tell you that they were turned off and/or grossed out by the cat stains.
More importantly, if you were willing to live with the cat stains, they wondered how many other (hidden) maintenance issues have been left unattended over the years. A fear of the unknown coupled with a potential buyer's imagination (they see **$ not dead people!) is far more significant to the buying decision (IMHO) than your lack of (stupid) granite!
If the realtors didn't see them, I'm surprised you didn't point them out. OTOH, realtors are smart. At that meeting, their goal is to obtain your listing. If they sensed your reluctance to do any work, they wouldn't have said anything, IMHO. They'd save it for later - after they had your listing. Again, IMHO.
So, anyway, that's JMHO. BTW, I always suggest to sellers that they remove all evidence of an animal's presence, if possible, when selling, even though I'm an animal lover and consider them part of the family. It's just one of those things you need to do, IMHO, if you want to sell your home within a reasonable amount of time.
Best of luck -This message has been edited. Last edited by: SurfNow,
Skyler, a couple of other small things - promise!
We can typically pull expired listings with the MLS number. If you don't care to post it for privacy reasons, it's o.k. to just say that. Or, if you feel comfortable pm'ing me with the info, I won't disclose it.
WRT your auction, I don't know its location but the auctioneers will typically pick up, pack and store your items. (Our office has handled sales with estate matters, included.) That may have helped you prepare the home and keep it on the market during the prime selling season.
Too bad that you don't feel you can make it work to keep the home listed. In RE, even more than other situations, you really do only get that 1 chance to make a first impression. The previous price and outcome will be known to serious potential buyers when you relist.
Again, good luck -
So here's a fun wrinkle for our Home C seller, Skyler - and anyone else who cares. That's probably nobody, lol -
The Home C seller receives an offer almost immediately from an investor for 95K. Why? Well, even though absolutely everything (or so everyone believed) is the same for these homes - that is, lot size, model and so on ...
The investor noticed that Home C was at the end of the block. The investor determines that a deck placed in the large yard's corner captures an incredible city view and significantly expands the living area. It's CA so it will be usable many months of the year.
That view is not accessible to the other 2 homes so the investor assigns a value to it. Nobody, not even the original builder, noticed this so the investor can capitalize. And, the investor, a pro, can see past the ugly kitchen. He'll paint out all the purple and replace the black and purple, sparkly, veined granite. (Or he'll even work with the granite - doesn't sound that bad, lol!)
The investor offers 95K right after Seller C lists. Seller C doesn't respond to the offer and tells his agent, "No ____ way, we have granite! It's worth our 100K listing price."
Seller C eventually calls the investor after a year and tries to accept the 95K, even though the offer obviously expired. The investor declines, explaining that they keep their portfolio invested at all times and don't have any current liquidity.
Seller C hangs up, muttering "$*22..)))$*#*@", meaning f something ...
The next day, after cooling off, Seller C calls his agent and makes the final price reduction to 90K.
This is what happens in real life, where I come from, anyway -
Sorry folks - not feeling well today so had to entertain myself, somehow!This message has been edited. Last edited by: SurfNow,
It seems that you have weighed your home down with heavy furniture, antigues, and just too much stuff.
Just a few suggestions.... Pack away most smaller items removing most items from walls. Replace drapes with modern, and remove white china cabit and black with metal piece of furniture.
Buyers can be distracted by things, and in this case there are alot of things to distract. Let the beuty of your home shine through.
I hope CCM chimes in... as she is an interior deisgner and can suggest the perfect setting for "showmanship" of your home.
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