The national average housing inventory (represented as the average time to sell the number of homes on the market) has dropped to about 6 months, the lowest it’s been since April 2006. A reduction in inventory is good for sellers, but this lovely low is only temporary. Spring is projected to bring a host of new listings, including the traditional uptick in fresh to the market homes, homes relisted after some time off the market, and the next great wave of foreclosures previously held (or held up) now ready to be moved. As competition again clogs up the sales lists, buyer’s will retain the power of the buyer’s market (when competition to sell is higher than competition to buy). Struggling sellers could drop prices further to lure in buyers, but in many markets, sellers who invest that money in repairs may see improved sales outlooks.
For many buyers, a fixer-upper is more work than it’s worth, especially in a flush housing inventory. Buyers want to use their ready cash for rate-reducing down payments, not upfront repairs. They reason, and rightly enough, that it’s easier to find a home with fewer flaws than putting in cash and effort after buying. Sellers willing to put in the effort to correct the most glaring flaws may see significant benefits. These days, repairs and renovations are not price points, but they could mean a sale several months sooner (or even a sale at all). In markets with a glut of new homes for sale, the renovation strategy is less successful, but in areas full of older homes, a fix-up can help a home stand out from, or at least keep up with, the competition.
Fixing up your home doesn’t have to be a money hog. Cleaning up the cosmetic issues and some fresh paint can work wonders for some properties. Dated kitchens and bathrooms are always seller eyesores, but don’t overdo it. Swapping the old avocado green or eye-popping pink for a neutral modern tile and tub or the beat-up countertop for a new one is enough. You don’t have to wow a buyer with expensive upgrades, just clean up the messes that will scare them away. Keep in mind the neighborhood and market, and don’t invest in upgrades beyond the norm. Overpriced upgrades could take your home past its rightful market; overshooting the market can push a home beyond the neighborhood’s price range or make it stand out in a negative way. Likewise, if your home sticks out from the neighborhood, designing your upgrades to “keep up with the Joneses” and match competitors’ offerings can remove some major roadblocks. Your realtor can help you identify the best fixes for your market and budget.
Spring is in the air, and it’s a great opportunity to pump up your curb appeal. Market-average houses with drab exteriors see a lot less traffic and interest, so a small investment and some seller sweat can give your property a much-needed facelift. A fresh coat of house paint, the application of a pressure washer, and some good old-fashioned yard work can work wonders. Add in a pop of color with a few flowers, and your home can be seen in a whole new light.
After your upgrades, be sure to have new photographs taken and new marketing materials distributed. The words ‘newly remodeled’ are good, but seeing is believing and a picture really is worth a thousand words. Investing money in the home you’re trying to leave behind can be unappealing, especially if you’re already taking a financial hit, but it could be just what you need to sell your home. Instead of dropping the asking price or losing money each month on an unwanted mortgage, consider investing that money in upgrades for a faster sale.
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About Geoff Thompson — Geoff Thompson is an Owner and Founding Partner of Express Schools, LLC. which operates online education providers Real Estate Express, Insurance License Express and License Tutor. Follow him on Twitter.