Beyond a Fresh Coat of Paint
Beyond a Fresh Coat of Paint
Ever arrive at a seller's home to do a listing presentation and discover the house needs more than cleaning and tidying to sell anywhere near the price the sellers want?
Since first impressions are critical for buyers, you may be tempted to forget the listing rather than spend time and money to advertise a losing proposition—especially during the busy spring buying season.
Buck up. By helping the sellers see the problems and suggesting improvements that won't strap their budgets, you can save the listing and possibly get more for the house than you'd get otherwise.
Here's how we did that with a listing whose kitchen was considered lovely in the 1970s. It had an attached pantry, loads of dark cabinets, orange Formica countertops, one paltry light fixture, and no eating area. There was a lot of counter space by the sink but practically none near the stove, which was on the opposite side of the room. The home is in a high-end neighborhood, so in order for it to sell at a price comparable to neighborhood values, the kitchen needed updating.
But the sellers were hesitant to remodel because contractors and interior designers had told them that new cabinets were a must—to the tune of about $40,000. We suggested ways to upgrade the kitchen, make the house salable, and spend less than $3,500.
First, we recommended that they replace the countertops with white tile bordered with oak molding. For extra pizzazz, they had a few tiles hand painted to match the flowered wallpaper in the adjacent dining room. Each hand-painted tile cost $15. If they don't have staff who can do it, tile and flooring supply stores can usually refer you to people who can hand paint. Since the tiles can easily be popped out, the hand-painted ones can be replaced with plain white if buyers prefer.
Then we encouraged the sellers to paint the kitchen, replace the light fixture with a fluorescent one ($250), and install a new vinyl floor ($1,500). We also added a bar-height table and two stools midway between the stove and the sink, which created an eating area and additional work space. The unfinished table and stools cost $300. The whole project cost about $3,100.
All the remodeling expenses were easily recouped when the house sold for $309,000 to the first buyer. Without the kitchen redo, the house might have been on the market a long time and sold for only $275,000-$285,000.
Our recommendations were geared to those things that create a positive first impression with buyers. According to Remodeling magazine's "1995-1996 Cost vs. Value Report," which surveyed more than 300 real estate salespeople nationwide, buyers crave modern kitchens in nearly all market price ranges. For more on the survey results, see "12 Remodeling Projects That Pay Off in Sales," also in this section.
To Fix or Not to Fix
When evaluating a house that needs significant improvements to sell, ask yourself four questions:
1. What will keep this house from selling? Is it simply excessive clutter? Or is it an outdated, dark, and dreary feel; an electric system, a furnace, a roof, or plumbing in serious need of repair; or an unusual floor plan, such as we found in the 1910 bungalow we remodeled?
Problem: The front door of the bungalow opened directly into the living room. The master bedroom was located immediately to the right of the front door. You could access the bedroom only from the living room or from a bathroom.
Solution: To detract from the floor plan flaws and create an interesting entryway, we added an 8-foot-high decorative screen to block the entrance to the bedroom from the living area, thereby allowing access only through the bathroom.
Focus on those items or features that will hinder a sale, not on how to make the house look like a page in Better Homes and Gardens. Sometimes you might not even see problems until you list a house and get feedback from potential buyers. That's how we learned about some problems with a property in otherwise excellent condition.
Problem: Its west-facing patio abutted common open space, creating a yard that had no privacy and was too hot in the summer.
Solution: We built a storable, 8-foot-high, redwood roll-up screen to block the sun and partly demarcate the yard. It cost $424. The house then sold.
2. Which of the identified improvements are minimally necessary to bring the higher price? Recommend improvements that will change the look of the house and overcome buyer objections but are as simple as possible.
Problem: A house with a cement patio and overhang, both in terrible condition.
Solution: We removed the overhang and covered the patio with redwood decking. The cost of the new deck was $1,300, much less than it would have been to replace the concrete for about $2,300. And a new overhang would have cost about $650. This house was in a moderately priced neighborhood, so the new deck was enough of an amenity that an overhang was unnecessary. The house sold for full price within the first week.
3. How will the sellers benefit from the proposed improvements? You need to spell this out to the sellers. It could be purely financial---selling the house for more than the cost of the improvements---or it could mean selling a property that might otherwise not sell.
Problem: A couple's $600,000 4,000-square-foot house had been on the market for nine years. They were resistant to making changes until it was clear the house wouldn't sell in its current condition. Location was part of the problem, but compounding that, two of the bedrooms had walls covered with dark brown cork, which was unsightly---and smelled. Cork can't be painted. Removing it is almost impossible because it comes off in small pieces like shredded rice crackers.
Solution: We built out the cork wall with drywall, which provided a vapor barrier against the smell and could be designed to match the rest of the room. With new carpeting and some additional work on the kitchen, the house sold. Although the improvements cost $10,000, we helped sell a house for which there had been no buyers.
4. What's the market doing? Find out what's going on in your marketplace and make changes that match the competition's. New-home construction is a good barometer because builders appeal to what buyers want. Model homes are masterful examples of how to use space and furnishings creatively for a fabulous first impression.
Pay particular attention to what's standard for the immediate neighborhood. If two-car garages are common but your sellers have converted their garage into living space, consider reconverting it, adding a new garage if the land and zoning will allow, or selling for a lower price.
Matching the competition extends to the type and grade of materials used. We suggested white tile to replace the orange Formica countertops in the kitchen example because in some parts of the country tile is considered a higher-grade material, and we were experiencing a large influx of out-of-state buyers. In other areas, consumers prefer Formica because they believe tile requires too much maintenance. In a very upscale house, anything short of Corian or marble might be unacceptable.
If you're stymied about what to advise, consider hiring an interior designer for a short consultation, at typically $75-$100 per hour, for which either you or the seller can pay, depending on what you negotiate. In our experience, the salesperson usually pays because the house payoff compensates for the cost of the consultation.
Sometimes the bottom line in any remodeling project is to get a home sold regardless of whether you get more than the asking price. After all, some problem homes won't sell no matter how low the price goes. If you can also make it as financially rewarding as possible for the sellers, you'll probably find yourself on the receiving end of a lot of referral business.
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