It’s not what they offer, it’s what you walk away with that counts!
When it comes to buying or selling a property, the conventional wisdom is that it’s all about the offer price and that certainly is a big part of the picture. However, a seller really needs to think about what they will walk away with, or rather, what they will NET; after all selling expenses are paid out. As a seller you have to make decisions that in the long run may end up costing you money.
Remodels are an area where you can make the costliest mistakes. Let’s say, you own a house with a bathroom and kitchen in original condition. You know you want to sell so you think upgrade first, and then go on the market. While this may help your home appeal to more buyers, are they going to pony up enough money to cover your cost? Will your home sell that much higher because of your improvements? In the end, are you better off making some cosmetic improvements and price it at a lower amount? Sure, you might not get the highest offer but it cost you less to get the price you did, thereby putting more money in your pocket.
Commission is another area where sellers think they are going to “save” money. Sure, they are not going to pay their own agent a commission but that doesn’t mean they will make more. Often, other agents are not going to show the property as they expect they will have to do twice the work to cover for the lack of experience on the selling side. Before they even write an offer, they will find out if you plan on paying a co-operating commission. If you have to do that, then you are only saving yourself 2.5% to 3% while you are going to be expected to do all the work on your end. In addition, buyers who know you aren’t paying out a commission will generally offer less, so you still end up with the same or less money in your pocket. Because it won’t go into MLS, far less buyers will see the place. In addition, by doing the transaction yourself, you are now open to liability issues and potential trouble if you did not follow all the laws to perfection.
In short, be sure you are looking at the whole picture. Discuss options with your Realtor ® to fully understand the cost of selling a home. Work for the best balance of money out followed by money in.
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4 Responses to “It’s not what they offer, it’s what you walk away with that counts!”
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Julie,
Great tips – it is amazing what remodeling returns. Kitchen and bath remodels always give a high return on investment.
Larry
Excellent points on all Julie.
Restraint is key with remodels, having the property show it’s best with freshened paint, flooring, landscaping and many times staging. Price of course is key.
A competitive commission is important and even a higher one (simply look at new home projects-the pros do it)!
Thanks again!
Brian
Julie, I agree thatshowing the home at its best adds value. Some basic cleaning, or painting can make a big difference. Staging can be very beneficial, too.
Shokoofeh
Great Post Julie,
I have personally seen many homes that have had a good amount of remodeling done. Often so much that the owners do not get the amount they would like out of the sale, the net amount you mentioned. As you mentioned it is extremely important for the owners and their realtor to discuss the various options in order to find out what best suits the owners needs.
As Shokoofeh said, some basic cleaning and a little paint can go a long way to improving the looks and feel of a home.
Thanks again and keep up the great work.
Adam