On the other hand, prices are at near record lows and may well dip further before they bottom out. So, sellers are hesitant to spend money on upgrades to their homes when they're not sure of how much of that investment they'll be able to get back when the home sells.
The balance between attracting buyers and preparing financially for a lower sales price than you hoped is a tough one right now.
The best advice we can give people whose homes need repairs or upgrades is not to try and sell right now. Waiting until there's less inventory and higher prices will make it easier to do those home repairs with the assurance that they will pay for themselves.
But, if you can't wait until the market recovers to put your home on the market, then you have to evaluate which repairs and replacements you should make and which ones you should avoid. Here are some tips for making those decisions.
- Right now, looks sell. Many of the homes you'll compete against in the marketplace are short sales and foreclosures. They have fantastic prices, but they often look terrible, and may need some serious repairs. If your home compares well cosmetically, it's a big plus. Even at great prices, many buyers simply don’t want to deal with a home that is severely damaged or has been trashed by previous owners. Spit and polish goes a long way, and it's very inexpensive. So, rather than replacing your ten year old stove and refrigerator, just make sure they shine like new.
- Things have to work. The repairs and replacements you really do have to consider are those that ensure that the most important items in your home function properly. The ten-year-old stove we mentioned above doesn't need to be replaced just because it's old. But, it has to work.
- Consider repairs rather than replacement. If your air conditioning system breaks, most experts would recommend that you consider replacing it rather than repairing it if it is more than eight years old. But, if you're planning to sell the home, and repairing the system is cheaper than replacement, it's a good idea to simply have the repairs done to save yourself the money. In today's real estate market, you will not recoup the cost of a new air conditioning system in the sales price of your home.
- Buy a home warranty. You can help ease a buyer's mind regarding the older items in your home by offering a homebuyer's warranty along with the sale of your home. For about $300, you are essentially providing a year's worth of warranty coverage on the most important systems in your home, like the air conditioning, heating and even major appliances.
Today's market is not the best for potential sellers. So, if you're planning to put your home on the market, be sure to take a good hard look at any repairs that might be coming up so that you can ensure your home is ready to show to prospective buyers, but that it doesn't cost you an arm and a leg to get it there.