Many home sellers ask… Should I upgrade my home before selling? Conventional wisdom tells you that people pay more for a higher quality product. That’s why a hand crafted artisan apple pie from your main street baker is going to cost you more than a mass produced one at the grocery store.
But what if a random apple shortage meant that there were only 50 apple pies in all of Denver? And what if there were 500 people looking to buy these pies? You can bet those bakers and grocers are going to bump their prices up a bit. And you can also bet that the buyers aren’t going to care much about the difference in quality of pie anymore—they’ll be happy enough to be one of the fifty people in Denver to even get a pie.
What’s all this have to do with real estate? Good question.
The pie analogy is the perfect hypothetical situation for any homeowner who’s in the market to sell and wondering Should I upgrade my home before selling?
You see, conventional wisdom says yes, of course! If you upgrade your home, people will pay more for it and it will sell faster because it will be more attractive to buyers. Right?
Not so fast…
Conventional wisdom only applies when things are going—well—conventionally.
But right now, Denver has a record low supply of homes up for sale. In fact, one home listed at $500,000 was recently viewed by almost 100 people in just 3 days.
If you knew that you were one of a hundred different people competing to buy a house, would you really care if the flooring was hardwood or laminate? or if the kitchen cabinets were modern enough to fit your tastes?
Nope. Just like the apple pie enthusiasts, you’d be fighting so hard to get any house that you wouldn’t bother to quibble over the little details.
Because Denver is a seller’s market, upgrading your home would be a waste of time and money. You would have to go through all the headache of deciding on changes, hiring contractors, and arranging logistics. You’d have to drop a lot of cash or take out a hefty loan. And in the end, you would probably sell your house for about the same price and at the same speed as if you hadn’t made a single upgrade.
You are much better off simply working with your real estate agent to price the house correctly, and then letting the buyers do whatever remodeling they desire after the sale. In the current market, Denver homebuyers are just looking to claim whatever house they can get. They can transform it into a home later.
While the hot market can let you get away with some peeling paint and a leaky faucet, there are some repairs that you probably still want to make if you are going to get the best price for your home. If you’ve got repairs that preclude a house from being “move-in ready” (like a roof in need of total replacement), you probably want to take care of them.
The average roof replacement in Denver ranges upwards of $10,000. If your home could go for $200,000 buyers probably won’t pay $190,000 for it because they could just get a different house with a good roof for $200,000 and not have to worry about getting the repairs done. More likely, you’d have to sell at a much lower price to someone looking to make a profit on a fixer-upper.
So the final verdict to the question of upgrading your home before selling is no, it’s not worth your time or money. Major repairs, on the other hand, are a good idea if you’re looking to get the best offer on your home.
If you are settled to spare the upgrades and ready to find realtor to sell your house, give us a call at 720 – 845 – 7400. We’d love to help you price your home for exactly the profit you deserve.