Return on Investment- Part 2 of 5 Series on Maintenance

Return on Investments Series- Part 2

Hello. And welcome back to our five part series on return on investment for home sellers. Today, we're going to cover part two, which is updates. So to review the five areas that home sellers need to invest in, in order to get the best return on investment for a successful sale are maintenance, updates, curb appeal, cleaning, and staging. Today, we're going to talk about the number two on that list, which is updates. So when it comes to updates, why would we do updates in a home in order to sell it? Really, it's because buyers today-We're not talking about buyers 40 years ago, they wanted to invest time and money in their house-We're talking about buyers today, wanting a move in ready home. They want to move in and they want to entertain tomorrow. They want to post those Instagram photos of their new house and show everyone what they just bought. The instant it closes. They don't want a fixer upper. It is not what the majority of buyers today are looking for. So keep that in mind, because really our goal, when we sell a house is to get the best offers and the fastest close is to appeal to the most number of buyers as possible. If what buyers are looking for is a move in ready home. We need to make that home move in ready. So that's why we do updates. There are probably three levels of updates that we typically are looking at. The first level has four things that I typically recommend. Those are painting-You are going to get a huge bang for your buck for painting. It's like insane. What a fresh coat of the right color pink can do for a house. I have seen houses, or I'll tell you one example that it's a house that had sat on the market with a different realtor for awhile. So I was a part of that process and it didn't sell, it was on the market for 60 days in a price point that should have sold. They changed realtors and that new realtor brought me in and we looked at what they needed to do. And the house was a phenomenal home, beautiful home, well-maintained, brand new kitchen. I mean, just really beautiful home and a beautiful area, but the walls were what was a color that was trending a while ago. It was kind of a butterscotch color. And so it just made everything a little bit dark. Where trends these days have gone the opposite direction. They're light, they're bright. So we recommend painted it. We got the painting done and it was sold four days later or went on a contract four days later. And that is the power of paint and yes, it was vaulted ceilings. And I was like, oh man, it's not the cheapest painting bill. But that house sitting on the market is costing that seller money. So getting the right color paint, getting it done, I've seen it work wonders. Okay. All right. Paint. The second thing on this level, one that we're always looking at is flooring. Do we need new carpets? Do we need fresh hardwoods? Make sure the flooring looks fresh, clean, and, ready to go. The next thing is light fixtures. It's a really easy fix to change out light fixtures. There's really affordable light fixtures ceiling fans that can transform a room from being, “oh my gosh, that was the nineties “welcome to 2022”. And then the final little update that we can do that has an impact and really has an impact for bathrooms and kitchens, which are very important to buyers is hardware and fixtures.

So faucets handles and things like that. Okay. So if those are addressed, then if the house is needs, it, what we look at, kind of a level two would be those things along with things like countertop backsplashes and tile. The reason we focus on those is because it affects the areas that are, you know, buyers are a big investment and really buyers make decisions on buying a house on which our kitchens and bathrooms. So kitchens you can really update, you know. I see beautiful homes, that beautiful cabinets that just have dated or tiled countertops, you know, it was done in the nineties. It was a thing. By changing that out and putting a new back splash that kitchen can feel like new. And then the cabinets, hardware and fixtures, you know, fresh paint. Now we have a move in ready kitchen that the buyers are going to be really happy with. The other thing would be tile on carpeted bathroom floors. So there is not a buyer out there that's going to walk in and say, “oh great, we have carpet in the bathroom” right?. No one says that. Um, pretty much, if you say carpet in the bathroom, I feel like if anyone's watching this, you're probably going, “ugh”, right? We don't care for it in the bathroom. So changing that carpet to a tile, the floor is going to be a wise move. The other one is back splashes. So we had a really strong trend and you can see it all over Colorado Springs is that Tuscan moment that we had 12, 15 years ago. You know, the city was exploding. We have lot of new builds that way our newer builds, but now 15 years later that look is dated and nobody wants it. So backsplash -changing out that old world travertine for something fresh and clean again, lighter, brighter is really what's trending right now. That can make a huge impact on how a buyer views the home. Okay. So that's level two. And then there's level three with updates. Of course, that involves more extensive rent renovation, not as common, but sometimes worth it. This is where crunching numbers does make a difference to know your market and know what you potentially can get. Renovating kitchens and baths, you know, bringing in a new kitchen can really, you can make a lot of money on doing that getting that done in your home. So, to give you some numbers on things like that, one of the listings that I've worked on, that was a level one, right? The paint flooring, fixtures and hardware kind of things that we addressed that buyer walked away with an extra 60 grand after costs were taken out.

Return on Investment Part 1 of a 5 part series- Maintenance

Hello. I hope everyone is having a great month. I'm going to start a four-part, sorry, five-part series on five things that home sellers need to do to prepare their homes for a successful sale. So those five things are maintenance updates, curb appeal, cleaning, and staging. So now, let's start with maintenance. So a well-maintained home is viewed by buyers as a newer home and obviously more desirable. I remember visiting a listing that I was interested in, and we had the key, and then we were trying to get in there.

Poor realtor was trying to unlock the door, and the door lock was just sticky. It was really hard to get, I mean, tons of jostling, trying to figure out, trying to see we can get different access points, trying to see how else we can get into the house. And then finally, finally, we're able to get that darn key to work, but that was an instant red flag as far as maintenance. I remember standing there and also having time to look around and just seeing kind of bad wood. And this is a nice area of town, but like, you know, poorly maintained porch, paint that was peeling. And it was just like, oh no, this house will be a headache. It's not the right one for me. So don't be that house. So really, the rule is when it comes to maintenance is if you have anything broken in your house, you need to fix it. So if it's broke, fix hit. So what does that mean? Everything, right? So if there's damage to those walls, you’ve got to get them fixed. If there are doors that open and slam and make a hole in the wall with door knobs that need to be addressed. Ceiling issues -Maybe something's been fixed up there, but now there's a big splotch in the ceiling. I'm sorry, that ceiling is going to have to get painted.

We don't want partial repairs. We want them all the way repaired. Faucets that are leaking need to be replaced; they can get fixed. Things that are going, you know, anything, any leaking issues obviously need to be addressed, windows that are broken, make sure they're fixed or replaced. Cabinet doors, things that are kind of off their hinges, and fix those. Probably another common one I see is closet doors, and those louver doors can get a little wonky; make those. Could you make sure those are addressed or replaced? Really anything. If you go through your home with a fine tooth comb, you see maintenance things that need to be repaired. I just wanted to let you know that this is the time to do it. So don't wait until the inspection for these to come up. Please don't wait for buyers to point out their concerns. That’s where you're going to start losing money. Okay. So the other side of that is once you fix a broken issue, make sure it looks fixed.

There’s been a number of times I've been in houses where you know there was water damage. Like there was a leak, and the leak got repaired. It's no longer an issue, but there's still a big spot on the wall, damage to a window sill, or a ceiling crack. And you know, the sellers tell me, oh, but it's been fixed. Yeah. But the buyers who walk through your house don't know that now all they think is all my, there's a crack in the ceiling. What other problems are there? We don't want buyers thinking that, um, really, it will lower your ability to negotiate the best price for your house. You're going to have buyers who now are less likely to put in an offer in the first place because they see that there are issues and don't want the headache. So our ultimate goal is to address maintenance. We want to do a few things. We want to put the buyer's mind at ease.

Like this is a great house. It's been well-maintained, and it's going to be a good house for me too. We want to have less to fix at the end. Right? So now we've negotiated a price we're under contract, and now the inspection report comes through. And all these things need to be fixed. Guess what guess what? That chips away at your negotiated price. Right? So you're like, yay. I have a great price. Well, now, if you have to address all these maintenance issues, you're losing money. Then, if they were addressed before that point, you can know what price it is. And hopefully, get better offers because it's a lot more well maintained, and you're not losing money on the backend. Now you're negotiating with some confidence, knowing that maintenance is already addressed, and you're not going to have to deal with losing money after the inspection report comes back. You also have a positive experience with you and the buyer.

Selling a home is super stressful. You already have enough on your plate besides dealing with the back and forth negotiations with a buyer that you're just hoping we'll get all the way to close. The buyers are stressed out, and they're coming to the table, buying something that's expensive. Right. Everyone’s on high alert. Let's make that whole experience positive for both you and the buyer-address those issues before it goes on the market, and then ultimately, when it comes to how a buyer views that house, when they go through it, if you're addressing all those maintenance issues when they do come, it does come time for that buyer say, okay, yeah, I do want to put an offer on this house if they have to think like, oh, but I need to make sure let's see, we got to address some of those.

That's a problem. That's not what I want. That's not well maintained. The offer that they're going to write is going to be less if they have to, you know, a factor that into their costs. So ultimately, the goal here is for you to have the most successful sale for you to make the most money on the outcome of the sale. Because it is an asset, usually most people's most significant asset for you to build wealth and have, uh, funding for your next adventure, your next house, right? So don't leave money on the table. A well-maintained whole house has more value to the buyer. The investment of getting those things fixed or going will be returned to you, and then some. It's going to return to you in a couple of ways. It's going to be returned to you in time. Less time on the market, which is big, right? More offers coming in, the more offers coming in, the more likely you're going to sell quicker. So you don't have the holding costs of keeping a house on the market. Maintaining all the cost that keeps it is to have a house mortgage, electricity payments, insurance, that kind of thing. So less time is always going to be more money.

The same thing with a faster close will save you time and headaches and give you more money. And then ultimately again, just other ways you can, you get a return on the investment better offers. You're not losing that money then by addressing inspection items. And also, if you do have a house that sits on the market longer, there is more of a potential for a price drop. So that's when you lose a nice big chunk of money, which we want to avoid. So could you get those things addressed, get them maintained? You know, you are going to invest money on the front end, but this is a return on investment deal where you invest it.