It’s been no secret that housing in the United States has been at a premium for the past year and a half, and though there has been some recent news that prices may be stabilizing, it begs the question: Is it better to sell now or hold off and hope for the market to continue its hot streak? Some analysts are concerned that housing may be operating on a bubble and that the bubble may burst any day.
However, the price imbalances, scarce inventory, and lack of sanity in sales prices show signs of slowing. Does that mean that the housing market will suffer a correction or housing price fall such as witnessed in 2008? Whether you believe that the market will suffer a correction or if the rate of appreciation will continue if you’re thinking of selling your home, are you looking to sell quickly, or are you willing to invest some money and make renovations with the hope of securing top dollar for your property?
While it ultimately is your decision alone, there are a few pros and cons to selling your home without putting any renovations before putting it up for sale. Renovations can be complicated, they take time and money, they aren’t easy, and there’s no guarantee that they will fetch a top offer.
The pros to selling your home without renovations are that you can grab the advantage of a red-hot market and get your home sold well above what you probably paid for it. Cons to selling your home without putting any money into renovations are that you may miss out on top-dollar for your sale. When weighing the pros and cons of selling your home with and without any renovations, you need to factor in a few different things to help you determine the right course of action for you.
Knowing The Risks of Spending Money on Renovations
Before deciding on costly and timely renovations, there are three primary considerations to help guide you -- know the market, check like properties, and consider the return on investment.
- Know The Market Conditions
When you’re listing your property during a buyer’s market, your home needs to be in tip-top condition to get the best offer. However, in a seller’s market, when interest rates are lower and there is less inventory available, home sellers have the advantage of not investing too much into their property and still get great offers.
- Check Other Similar Properties
Using a CMA, or Competitive Market Analysis, of similar properties will give you an idea of what homes like yours are selling for and their condition before the sale.
- What Is The Potential ROI
ROI stands for “return on investment” and should be one of the critical factors in your decision-making on renovations. Too often, sellers think that if they invest X amount of dollars in their home, they will get an offer of X+ listing price. Too often, this is misguided and wrong.
In some cases, people are looking for “turn-key” properties, that is, a home that is ready to move in with a lot of top-notch upgrades and fixtures. However, there are even more buyers that are looking to put their touch on the house, so your renovations may not even be necessary.
You may have an advantage over other sellers by investing time and treasure into renovating your home, but those advantages aren’t as necessary in hot markets. In addition, by putting money into your home, you may not necessarily recoup what those costs were, meaning your profit on the sale of your home may be less than it could be if you just let it be.
In essence, sellers have the luxury of listing a property and testing the market most of the time. So, if you’re looking to sell your home, the best way to sell it is to get it on the market.
The best strategy then is to make minor renovations such as patching up any possible cracks, touch up the paint where needed, and replace any fixtures that are broken or damaged then test out the price and the condition of the home as-is. There are advantages to this strategy of selling a house as-is, from possibly getting it sold without any costly repairs to finding what is acceptable to the market.
partnered post • cc-licensed image by Alan Gold