The 2019 market is getting into full swing!   The theme for my business this year is turning out to be homes that need updates and whether or not to do them.   Obviously, a home that has newer updates will appeal more to buyers and sell for a higher price.   The question comes in when trying to decide to update for the market, how much to do/spend vs pay off when the house sells.  What I have found is that no two fixers are alike.  There are generally two categories…..

The immaculate home that is dated.  This seller is often faced with a home that is over 15 years old and has not been renovated in all that time.   They have taken excellent care of the home overall and may have done a few minor changes over the years  but have not brought the home up to current standards – materials or fixtures – wise.   This is a tough one.  These homes are not gut- rehabs or on a list to sell to an investor.  They are extremely livable – just not updated.    If the seller would rather not make any major updates, then the price will need to reflect the need for modernization.  Kitchen and bath updates are expensive and make a home hard to live in while they are going on.   Flooring changes can be very disruptive too  and also costly when you are looking at over 2000 sq ft of floors to update!   People with these types of homes need to also consider not only interior updating costs but also exterior issues that might come up.   Electrical, roof, decks, foundations, sewer laterals, siding and other major systems issues can also add to the cost a potential buyer will need to consider if they purchase the home.

Moral of this story:   its not a bad idea to update your home periodically in the time you own it.   Every 10-15  years is a good rule of thumb.  And you don’t have to do the whole house, just the major cost areas as they are needed.    Not only will it reflect better when you decide to sell, but when you renovate, you tend to find potential problems inside walls that could kill a deal down the road.   By renovating periodically you keep your house fresh, current and avoid nasty surprises when you do sell. By doing updates during the life of your ownership, you also avoid spending a lot when getting ready to sell and not realizing full dollar for dollar return.

The unlivable rehab:   This home is one that has not been renovated and also has not been well cared for.  This home would be on a list for an investor to buy for pennies on the dollar so that they can gut the home and then sell.   I’ve seen many of these types of homes being dealt with by heirs after a parent has passed on.   Sometimes homes are neglected due to owner illness and things fall into disrepair.  In these cases many heirs opt for emptying the home of contents and then selling  “as is” or to an investor.   This can be a good choice because often the investors save the seller on some commission costs.  And by selling as is, the heirs do not have to do any repairs.  It’s also hard for heirs to travel to the location of their parent’s home from their own location trying to oversee a renovation.   Downside, price point will be substantially lower.

I have had two situations where children wanted to renovate their deceased parent’s home.  Both had sentimental/emotional reasons for doing so which I completely understand. When this route is chosen,  it’s hard to gauge an exact payoff in terms of sale price.  Clearly, more will be gotten with a newly renovated home but it will not be a dollar for dollar return.   There is a psychological sense of closure when a son or daughter hands off their parent’s newly renovated home to a new family.  It can be very uplifting and cathartic!  Downsides are cost of renovations and those pesky hidden issues that might be found during renovation.  Important things to remember here are having some help with design choices/color schemes.   I would not want someone to go to the expense and trouble of a renovation only to make choices that are not current or desirable in today’s market.

In either the immaculate but dated home or the unlivable rehab,  a seller needs to also take into account how much is owed, if anything on the home.   In the case of the unlivable home, usually these are long term homes that are paid for.   This is helpful when making a decision to do a renovation.   If there is a mortgage on a home then perhaps a minor renovations will help to get a better price, helping a seller as they move on to another home.

If I could give advice to any  home owner, I would say to keep your home current.   Make  updates as you own the home.   Change appliances,  dated flooring and counter tops in kitchens and bathrooms.  Update or refresh cabinetry, either by painting or refacing – both fairly economical compared to cost of new cabinets.   You can do it a bit at a time, over time and you also get to enjoy the updates too and are not just doing things to pass on to a new owner.