Recently, a seller listed his triplex condo in Boston’s Back Bay neighborhood for sale. On the surface, it had all that buyers look for – three spacious bedrooms, two and a half bathrooms, great natural light, an outdoor space and even a coveted parking space. Knowing that the market was strong and inventory was scarce, the seller demanded a high price per square foot and expected much interest and multiple offers.
The first open house was very busy and his listing broker reported many private viewings. To his great surprise, the first weekend on the market came went with no offers presented. As the first week came to a close, it was clear to him that something was not right.
Asking his broker for buyer’s feedback the broker replied: “Most visitors commented that your renovation was very specific and that they would need to remodel what had already been done in order to enjoy the space, requiring them to spend money above the already high asking price.”
Two price reductions later the seller was finally able to find a willing and able buyer.
You’d be surprised how many homeowners decide to renovate their home without first consulting with their real estate broker. There are many reasons for that – excitement, forgetfulness, a strong feeling of “knowing what is right”, not seeing their broker as an authority when it comes to renovation and home improvement. In many cases, not asking for a broker’s opinion on renovations can be a big mistake, often causing a place to linger on the market longer than it should and selling for less.
As an experienced broker, I have found one of the most important question to ask yourself before you contemplate any renovation is “How long am I planning to live in this home?”.
The answer to this very basic question can help guide you in evaluating and recommending how far you should go with a renovation.
Once you have answered that question, these are other important questions to consider:
- How personal should I go with kitchen and bathroom finishes?
- What about choices in paint colors?
- Should I remove or introduce new partitions within the house?
- How important is a tub versus a standing shower?
- Should I spend money on “invisible” improvements that will make my living more pleasant – insulation, sound-proofing, etc. – but most likely will not be viewed by future buyers as significant?
- Is it worth it to replace old windows which often involves much more than the window itself and can be very expensive?
- Should I make changes to my flooring – hardwood, carpeting, other?
These questions might be answered differently depending on each buyer’s situation and the local market. That’s where an experienced real estate broker can be a valuable asset.
Improvements I consider as “additions” are usually the most lucrative for homeowners. Adding a room, finishing an attic, adding a full bathroom or powder room, enclosing an existing deck or building a new deck are all in the safe ‘cost versus value ratio’ column. Such improvements, if done properly, should not only bring you enjoyment but are sure to add equity to your home.
Other improvements such as kitchen and bathroom renovation, new flooring, painting, central air conditioning, sound, and window replacement are a bit more tricky and should be examined carefully before committing to a project.
My opinion is this – if your horizon is short, make sure to improve your home in a simple and less personal manner. If your horizon is long, you have more freedom with personal choices though use some judgment in order to accommodate the unforeseen.
Every seller should know that there is a direct link between DOM (days on market) and the final sale price. The more days on the market the lower the sales price. Renovations done wisely are sure to influence a quick sale and bring about a better sale price.
Make your real estate broker your first stop once you begin the process. An experienced professional will be able to guide you while keeping all aspects of your property in mind (neighborhood, specific market, price to sell, personal taste & horizon). With that initial advice in mind you will be able to better approach your architect, designer and builder.