The time has come to sell your home and you are facing an important decision: should you renovate your home or not? Whatever your decision, the outcome will certainly affect the marketability of your home and the amount of cash you're going to add to your bank account.
Your home is likely the single largest financial investment you will make in your lifetime. Unless you are a real estate investor, you will likely buy your first home when you are in your twenties, or as soon as you can afford it. You scrimped and saved as much money as you could to make the down payment, taken out a 30-year mortgage and kept up your home over the years. With every mortgage payment, your investment equity has increased and you are expecting a nice return on your investment when you find just the right buyer. Whatever the reason for the sale may be, you're facing with the difficult task of determining whether to invest more money in your home by renovating. However, how do you know that making renovations just prior to a sale is a good idea?
Renovating may sound like a good idea, at first. There are plenty of reasons to do so, such as improving your home's curb appeal, making those minor repairs that you somehow never got around to, fixing the roof, or updating those fixtures from the fifties. All of these problems, and probably many more you can think of, are looming large in your imagination. What will a potential buyer think about your home if they discover the water stain on the ceiling from that annoying leak in the roof? What about all those avocado colored appliances in the kitchen? Sure, they are still in fine working order. But will a young couple searching for their first home appreciate those retro colors? Perhaps not, but remember this. You cannot buy your home for them. Every buyer has their own emotional and rational reasons to buy or not to buy everything, and your home is no exception.
"To the old saying that man built the house but woman made of it a "home" might be added the modern supplement that woman accepted cooking as a chore but man has made of it a recreation." ~Emily Post
Every potential homebuyer comes equipped with a set of ideas about what he or she is looking for in a home. There are always going to be deal killers, such as cracks in the foundation, a leaking fuel oil tank in the basement, a sagging roof, black mold, or something really smelly that you just can't seem to get rid of. For the most part, however, if you haven't fixed any of these problems as they came along, you probably shouldn't expect to make much of a profit anyway. You should expect that anyone contemplating buying your home has already considered these issues and weighed the importance of them before contacting your real estate agent or broker.
Homebuyers are going to be looking at your home for any number of reasons, which you can never know. They will like or dislike the kitchen, the bathroom or the yard according to what they see and what their preferences are. These are the most important selling features of a home when it comes to selling. Every other room and feature is usually peripheral in their mind, even though you might consider them very attractive and desirable. For instance, an in-ground pool in the back yard might have been an important family entertainment center for you, but if the buyers don't want the hassle of maintaining an in-ground pool they are likely to downgrade its importance in making a decision to buy or not.
Now that doesn't mean that you should fill in your pool, it only means that some potential buyers will appreciate your pool and others won't. Your goal is to sell your home with all the wonderful features that you have appreciated over the years to someone with similar appreciations, not to try to please someone you've never met before. A bit of good advice would be to accentuate the stronger features of your home by sprucing them up a bit, but don't go overboard and think that you have to make your home a showcase. The cost of doing so, especially in today's tumultuous real estate market, is likely to outweigh the return.
So, just what should you do? To begin with, your best investment may be the time you spend researching buying trends in the real estate market in your area. Go on a real estate tour yourself. No one has to know that you're a seller and not a buyer. You will quickly learn what makes one home more marketable than another. You may also be surprised to learn that something you thought were important, are actually not so important when compared to others. For instance, you may think that your old kitchen cabinets need upgrading, but if they were originally built with good quality, they may just what some buyer may be looking for.
Next, find out what you can about who is buying what. Your best friend in conducting your research may by your realtor, as they are professionals that have years of experience in the local real estate market. Not only do they know the real estate market, realtors are quite knowledgeable about the needs and motivations of today's buyers, as well. They will have a lot of information about population trends, employment and income trends, financing trends, and community economic trends. These are all important factors that are driving factors in home sales. You can rely on their information and they can even advise you on the importance of making any renovation decision you are considering.
Today's real estate market is topsy-turvy. In some areas, it's declining due to the sub-prime mortgage melt down. In other areas, the market has remained relatively strong, although overall home values are declining. Most real estate experts recognize that these are only a temporary adjustment to an over-inflated market to begin with. Once these financial problems are worked out, the market will stabilize and home values will once again resume their investment value. You should keep a watchful eye on your local real estate market trends, as they are far more important than any national trends are.
You could renovate your home before placing it up for sale, or you could wait it out a bit and conserve your cash in the process. Whatever your decision, you should now understand that making a decision to renovate prior to selling is an important decision that calls for a sound decision making strategy. Consider the decision factors presented in this article and keep in mind that buyers make purchases first on emotional reasons and then on rational reasons. As a seller, you should try to address the emotional motivations of potential buyers according to the buying trends in your area. A simple clean-up and clean-out, along with a fresh coat of paint may be all you need to cash in on your investment. Be patient and confident in your home's value, and the right buyer will surely come along and appreciate it.