I receive allot of questions about how to present a house for sale, and on the other side, about buying a Fixer Upper for profit. Here are some ideas and information to consider before doing either.
Enjoy the read, and feel free to pass it along to your friends and family.
Of course, if you have any questions, don’t hesitate to send me a note or give me a call. I’m always happy to help!
16 Low Cost Tips To Improve Your Home’s Curb Appeal to Prospective Buyers
Your main goal when selling your home, is to sell it quickly at the highest price while investing as little as possible in renovations. With a limited budget and a little effort, you can greatly increase your home’s appeal by focusing on what prospective buyers can see on the first visit.
“If they don’t like what they see outside, they’ll never walk inside”. Curb appeal can often mean the difference between a house sitting for months or selling in a few weeks.
The view from the street can net you more traffic than you might think. Seventy-four percent of all home buyers use the Internet to shop for a new home, according to figures from the National Association of Realtors.
Here are a few tips from professional home estimators to help you prepare your house for sale:
1. Refresh the exterior
First impressions count when it comes to selling a home. A majority of buyers will not even get out of their car if they do not find the exterior appealing. The best way to improve your exterior includes:
• Repairing and/or replacing trims, shutters, gutters, shingles, mailboxes, window screens, walkways, and driveway.
• Painting siding, trim and shutters, and lamp and mail box posts.
• Pressure washing vinyl siding, roofs, walkways, and driveway.
• Washing windows.
2. Tidy lawn and landscape
Home buyers associate the condition of your lawn and landscape with the condition of your home interior. The best way to enhance the yard includes:
• Mowing and edging your lawn.
• Seeding, fertilizing, and weeding lawn.
• Trimming and/or removing overgrown trees, shrubs, and hedges.
• Weeding and mulching plant beds.
• Planting colourful seasonal flowers in existing plant beds.
• Removing trash especially along fences and underneath hedges.
• Sweeping and weeding the street curb along your property.
3. Create an Inviting entrance
The front door to your home should invite buyers to enter. The best way to improve this includes:
• Painting the front door in a glossy, cheerful color that compliments the exterior color.
• Cleaning and/or replacing the door knocker, locks, and handles.
• Repairing and/or replacing the screen door, door bell, porch light and house numbers.
• Placing a new welcome mat and a group of seasonal potted plants and flowers.
4. Reduce clutter and furniture
A buyer cannot envision living in your home if they cannot see your house. A home filled with clutter or even too much furniture distracts buyers from seeing how they can utilize the space your home offers. If you have limited storage space, you may want to consider renting a temporary storage unit to place items you wish to keep. The best way to improve your home includes:
• Removing clutter such as books, magazines, toys, tools, supplies, unused items from counter tops, open shelves, storage closets, garage and basements.
• Storing out of season clothing and shoes to make bedroom closets seem roomier.
• Remove any visible damaged furniture.
5. Clean, clean, clean
The cleanliness of your home also influences a buyer’s perception of it’s condition. The appearance of the kitchen and bathrooms will play a considerable role in a buyer’s decision process, so pay particular attention to these areas. The best way to improve this includes:
• Cleaning windows, fixtures, hardware, ceiling fans, vent covers and appliances.
• Cleaning carpets, area rugs, and draperies.
• Cleaning inside refrigerator, stove, and cabinets.
• Removing stains from carpets, floors, counters, sinks, baths, tile and grout.
• Eliminating house odours, especially if you have pets.
6. Make minor repairs
The small stuff does count, especially with first time home buyers. Without dismissing the importance of repairing major items such as a leaking roof or plumbing, you do not need to spend money on replacing these items. Instead, focus on the minor repairs that make your home visually appealing. The best way to improve your home includes:
• Repairing ceilings and wall cracks.
• Repairing faucets, banisters, handrails, cabinets, drawers, doors, floors and tile.
• Caulking and grouting tubs, showers, sinks and tile.
• Painting ceilings, walls, trim, doors and cabinets.
• Tightening door handles, drawer pulls, light switches and electrical plates.
• Lubricating door hinges and locks.
7. Showcase the kitchen
The heart of any home is the kitchen. If you are going to spend any money on renovations, this is the one area where you will see the greatest return. Even with a modest budget, focusing on a few key areas can make a great difference in getting the asking price for your property. The best way to showcase the kitchen includes:
• Replacing cabinet doors and hardware.
• Installing under cabinet lighting.
• Replacing light fixtures.
• Replacing outdated shelving with pantry and cabinet organizers to maximize space.
8. Stage furniture
Furniture placement can enhance the space of your home while giving buyers an idea of how to best utilize the space with their own belongings. Take some time out to rethink how different areas in your house could be used. Some ideas to think about includes:
• Moving couches and chairs away from walls in your sitting and family rooms to create “cozy conversational groups.”
• Creating a reading corner in the master bedroom.
• Clearing an empty room to setup a reading space.
• Turning an awkward space into a home office.
9. Light up the house
Create a sense of openness and cheerfulness in your home through lighting. To improve the lighting try:
• Opening shades and drapes to let the sun shine warm and brighten rooms.
• Installing brighter light bulbs in rooms that tend to be dark.
• Adding additional lamps for ambient lighting.
10. Freshen up the garage or workshop
• Items should be neatly stored in shelving or wall units.
• Allow appropriate space for the homebuyer to visualize their vehicle or workbench.
• Consider moving excess or over-sized items to mini-storage.
11. Add natural touches
You can easily add color and style to your home by placing fresh flowers and fruit bowls throughout it. Some ideas to consider includes:
• Placing fragrant arrangements in the entry and master bedroom.
• Placing bowls of bright coloured fruit in family room and kitchen.
• Filling an empty corner with a potted leafy plant.
• If you have room, go for the traditional two large planters, one on either side of the door or walkway. Fill them to overflowing with flowers if it’s spring or summer or evergreens in the cooler months. This will create a focal point, forcing home buyers to focus on one area rather than the whole home at once.
Remove objects that your potential buyers won’t be able to identify with. For example, political and religious items may turn off whole groups of buyers, because they cannot “imagine” your home as their home. Buying a home is an emotional decision, and you want potential buyers to make an emotional connection with your home by being able to “see” themselves in it.
13. Keep your pets under control
Always keep your pets under control. Try confining them to a specific area. Although you may love your pets, they can be off-putting to other people, and smells can be offensive, so make sure there are no lingering odours in furniture or flooring, and if there is, get them cleaned before you sell.
14. Fit into the community.
If there are tons of kids in the neighbourhood, it’s OK to have a bike in the yard. Not so if your neighbourhood is mostly retirees. Keep your audience in mind as you show your house.
15. Don’t forget the rear view
Buyers doing a drive by will try their best to see your back yard. If it’s visible from another street or from someone’s driveway, include it in your curb appeal efforts.
16. Evening curb appeal
Do your curb appeal exercise again at dusk, because it isn’t unusual for potential buyers to drive by houses in the evening. One quick way to improve evening curb appeal is with lighting:
• String low voltage lighting along your driveway, sidewalks, and near important landscaping elements.
• Add a decorative street lamp or an attractive light fixture to a front porch.
• Make sure lighting that’s visible through front doors and windows enhances the home’s appearance.
Cosmetic changes do not have to be expensive. In fact, costly home improvements do not necessarily offer a good return on your investment when you sell. It’s attention to the basic, anything that says “this home has been carefully maintained”, that will help you get the price you want.
FIXER UPPER MYTHS & FACTS – What You Should Know BEFORE You Buy
“A home will only sell for what the market can bear. What this means is that no matter how many upgrades were made, or how much money has been invested in the upgrades, a home will only sell for what the majority of homebuyers are willing to pay.”
Before deciding that your next home must be a fixer-upper, you should do some homework into what to expect when purchasing these types of homes. Many prospective homebuyers tend to have a romanticized version of the entire process, and are quite shocked when confronted with the hard reality.
Fixer Upper homes can often represent a good deal, but there are some points that a homebuyer should be aware of before making that offer.
MYTH #1 . . .
I can make a “killing” in the real estate market by buying a run-down home, for tens of thousands of dollars less than the average home, fixing it up, and then immediately selling it for full price, or more.
FACT #1 . . .
Most homeowners looking to sell their “fixer upper” home understand that they will have to list their home at a price that reflects the cost involved in restoring the home to its original condition. The asking price of a fixer upper is usually calculated so that the savings represented by the lower than average market price is roughly equal to the amount of money that a buyer could expect to spend on necessary renovations. Updating the “look” of a home, or upgrading to higher-end finishes, is not included in these calculations, and you should be careful not to spend so much money on renovations that you are unable to recoup your investment.
MYTH #2 . . .
If I’m buying a fixer-upper home, I don’t need to bother with the added cost and aggravation of a home inspection because I already know what I’m getting.
FACT #2 . . .
A home inspection should always be included in an Offer To Purchase and Sell agreement, and it is arguably even more important to include one when you are looking to buy a fixer upper. Structural defects are normally not visible to the untrained eye, yet will cost much more to repair than the obvious cosmetic fix-ups. Most licensed home inspectors will not only detail the defects that they uncover, but can also give you a good idea of the costs involved in fixing them.
MYTH #3 . . .
It’s better to pay a lot less and buy a “fixer upper” in an undesirable area, than to pay more for a comparable “fixer upper” in a better neighbourhood.
FACT #3 . . .
Most of us have heard the quote, “the three most important things to look for when buying a home are: location….location…and location!” While this is obviously meant to be funny, and is a somewhat oversimplified rule of home buying, it does drive home the point of how important it is to consider where you will buy your home. Purchasing a fixer upper in a desirable neighbourhood will cost you more initially, but the payoffs — personal peace-of-mind and higher return on your home investment when you sell — should not be overlooked.
MYTH #4 . . .
Once I fix this house up, I can turn around and sell it for double the price I paid.
FACT #4 . . .
A home will only sell for what the market can bear. What this means is that no matter how many upgrades were made, or how much money has been invested in the upgrades, a home will only sell for what the majority of homebuyers are willing to pay. Factors to consider when calculating your possible return on investment:
1. Location: What kind of a neighbourhood is the home in?
The type of neighbourhood will determine which type of buyers you will attract when you decide to sell. For example: An area consisting of mostly “first time buyers” will attract buyers who have a strict and limited budget. They are looking for affordability above all else – including high-end finishes and perfectly landscaped gardens.
2. Neighbours: What are the neighbouring homes like?
A beautiful home surrounded by unkempt, run-down homes will sell for much less, than a beautiful home surrounded by well kept, nicely maintained homes.
3. Surroundings: What are the surrounding features?
Buyers are willing to pay more for a home that is in a convenient, yet quiet locale. While you may find it convenient to side onto a school, many potential buyers would eliminate such a location due to the noise level associated with the presence of hundreds of excitable children, and the congestion caused by school buses and parents dropping off and picking up students.
MYTH #5 . . .
I can make a lot more money by turning this single family home into a multi-family dwelling.
FACT #5 . . .
While this statement is for the most part true, it may not be possible. Most towns and cities have strict zoning laws that not only dictate the maximum allowable occupancy within any given area, but also dictate the size and design of a home when building new, or creating additions to an existing structure.
Once you have thoroughly investigated the pro’s and con’s associated with purchasing a fixer upper home, and you have decided that it’s right for you, be sure to “run your numbers”.
1. List Price of Fixer Upper
2. Average Recent Sale Prices of Similar “Non Fixer Upper” Area Homes
3. Estimated Cost of Repairs from Reputable Source (e.g. referred Renovation Company)
4. Buffer Amount for “Unexpected” Repair Costs (usually 1/2 of estimated total)
5. Selling Expenses (real estate fees, lawyer fees, closing costs)
6. Amount of Profit You Desire versus Amount of Actual Profit
1. $200,000.00 = List Price of Fixer Upper
2. $255,000.00 = Average Sales Price
3. $ 25,000.00 = Estimated Repairs
4. $ 12,500.00 = Buffer for Repairs
5. $ 17,000.00 = Selling Expenses
6. $ 20,000.00 = Desired Profit Versus Actual
Profit of $500.00
If your intent was to purchase the house shown in the example above, make the repairs, and immediately list the house for sale, your Actual Profit shown is only $500.00. If, however, your intent was to purchase the same house, but actually live in it for a few years before selling, you would normally expect to turn a much better profit for two reasons:
• First, historically speaking, the real estate market normally goes up over time and your anticipated sale price would be higher – affording you more profit.
• Second, the money that you would have been paying in rent to live elsewhere – with no return – is actively paying down your mortgage and increasing your equity.
As with all investments, though, nothing is guaranteed. So when looking to finance a home, keep in mind that the real estate market has taken some big hits in the past. Never overextend yourself financially.
Please note that the figures in the calculations shown were used for example purposes only. Local housing prices, repair costs, and selling costs will vary greatly from one location to another. It is recommended that all Buyers thoroughly research their local costs and legal restrictions before purchasing.
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