To Fix or Not to Fix before putting it up in the market
Time and again sellers of property ponder upon this question whether or not to fix up problems of the home before putting the home up for sale in the market. This is one of those questions where the answer depends on variables such as whether it's a hot, cold or neutral real estate market, location and the likelihood of return on investment.
Firstly, there is no hard and fast rule. The following are just some general guidelines that apply to most homes.
It comes down to the price you’re asking, the time you have to sell the home and the present condition of the house which will be the basis for your decision on the type and amount of work to be done on the home.
Should you be in a hurry to sell, do the “little things” that make your home look better from the outside and show better inside. Quick fixes before selling a home always pay off.
There’s a common real estate term called “curb appeal”. This is for everything prospective buyers can see from the road that might make them want to turn in to have a look. This is important as you want to generate traffic to your home. It does take time of course. However, it need not be expensive or too difficult to do. The most important is to keep in mind that neutral and neatness count the most.
Neatness for both the inside and outside of the home. A fresh coat of paint with neutral colours gives an instant good feel of the home. Prospective buyers spend more time than you think looking at ceilings and walls mostly to see signs of leakages, stains and cracks. A fresh coat of paint is the most cost-effective improvement.
Keep clutter out of sight and your personal belongings neatly and in order. Keep the house clean. Neatness on the outside would mean a decently kept garden. This again will attract prospective buyer to see the rest of the house.
Renovations are Advantageous
Most homes have extended kitchens. Most prospective buyers view extensions to the home as an advantage as not as much time, effort and money need to be spent to renovate the kitchen or the entire house. However, if your kitchen cabinets are dated and worn-out, this would be seen as a disadvantage.
Keep bathrooms tidy and in good condition. Simple improvement on lighting and fixtures could do the trick. Updated plumbing and electrical wirings are an advantage.
Overall, prospective buyers want to buy a home that has the least issues or problems. In their minds, they are paying for a more “complete” home. We must remember that renovation costs are out-of-pocket expenses that are rarely funded by financial institutions. This would mean that the more work required on the home, the fewer the number of prospective buyers. Convenient and “ready-to-occupy” is an advantage.
“As Is” Condition Still OK
There are times when a home requires too much work to make it look attractive to prospective buyers. Fixing it up would just cost too much. At the end of the day, if the property is priced low enough, it will attract offers. Contractors and flippers will make offers for the home. The average buyers would be turned away by the amount of work the home requires.
Do Home Buyers Want “Fixer” or “Ready” Homes?
Some home buyers want to buy a “fixer” home, but generally these buyers want a home that will require only small repairs.
“Fixer” buyers will discount the price of the home to allow for the repairs and, for the inconvenience, a bit more. Say if there was a bathroom leak and it cost RM10,000 to repair, a buyer may offer RM645,000 for a RM660,000 property. Otherwise, they could just buy a similar home for RM660,000 and not have the hassle of fixing. So depending on the offer, a seller would be better off fixing up the leak and selling the home at the price of RM660,000.
Many buyers will not buy a home that needs a lot of fixing. The worry about the work and cost involved could be more than anticipated. Most buyers want a home that is in move-in condition. For most buyers, it is hard to find reliable contractors to fix up problems. By not making repairs, you will limit the number of buyers who may be attracted to your home.
Before Fixing Up Your Home
Smart sellers will weigh the cost of proposed improvements against the home's market value after the repairs or upgrades are completed. If an upgrade won't return the investment, such an improvement might not be warranted. Before you decide to lift the roof and install skylights in the master suite, realize that kitchens and bathrooms carry the highest return.
A friend of mine owns an old but well-built bungalow in Damansara Heights and has put the home in the market for sale at RM4million for over a year. Though the interest was there, the offers received were much lower. He then decided to put in a pool, re-designed all the bathrooms with a fresh coat of paint and is now getting more interest at higher prices.
Make a list of everything that is defective, broken or worn-out. If buyers spot problems, they might wonder what else in the home has been neglected. First impressions count with buyers.
If the real estate market is extremely hot as in a seller’s market, your can get away with very minor or not even fixing up before selling. However, a home that needs repairs will still deliver a lower price. In a slower market, a buyer’s market, buyers might not even look at a home that needs a lot of work.
Chan Ai Cheng
General Manager, S. K. Brothers Realty (M) Sdn Bhd Registered Estate Agent with the Board of Valuers, Appraisers and Estate Agents Malaysia (LPPEH), Member of the Institution of Surveyors Malaysia (ISM), and the Malaysian Institute of Estate Agents (MIEA), Registered Financial Consultant with the International Association of Registered Financial Consultants (IARFC), For any feedback on this article, please email firstname.lastname@example.org