A retired federal employee in his 70s was highly motivated to sell the brick ranch house he’d inherited from his parents. By quickly downsizing to a small condo, he could liberate himself from nagging money problems. Hence, a few days ago he called his friend Sid Davis to list his place for sale.
Davis, a veteran real estate broker, told the owner that to maximize his proceeds, he’d need to update the house. Cosmetic improvements alone could net him an extra $20,000.
“Walking into this house was like going into a time warp. This was a true ‘fixer-upper.’ The kitchen had old linoleum countertops in sick gray. The badly worn carpets were original to the 1960s, as was the dated wallpaper throughout,” Davis says.
In a typical real estate market, the owner’s "fixer" would have languished unsold for a lengthy time, attracting only deeply discounted offers. But Davis told the owner that the current market -- with a severe shortage of available homes -- was far from typical.
“Sellers today are in the catbird seat. For the time being, Lady Luck is smiling down on them. Almost any decent house, so long as it has a roof and four walls, is very marketable,” Davis says.
Short on cash and in a hurry to liquidate, the retiree opted against upgrades that would have yielded him a higher price. Even so, the same day his place hit the market, it produced 20 showings and sold for the full asking price within hours. It was purchased by a couple in their 20s who vowed to renovate it themselves.
What’s the moral of this true tale? Davis, who’s sold homes since 1984, says this is one of the rare periods when housing demand so greatly exceeds supply that even fixer-uppers are attracting multiple offers.
“In my experience this has only happened a few times in recent decades. There are several reasons why it’s happening now. One is that mortgage rates are rock bottom. Another is that COVID is causing countless folks to seek better dwellings,” says Davis, the author of “A Survival Guide to Selling a Home.”
Of course, many sellers are willing to spend the energy and money needed to maximize their profits, assuming they can afford to do so.
Here are a few pointers:
-- Choose an experienced agent who offers sage guidance.
Eric Tyson, a personal finance expert and co-author of “House Selling for Dummies,” says agents vary widely in their skills and abilities.
“You want someone who will help you develop a strategic, step-by-step plan that works within your budget, however limited. Then you have to be open-minded about the necessary changes,” Tyson says.
Some agents will even step into the role of project manager, helping you find contractors willing to take on small jobs for reasonable prices.
“It could be a waste to pour your limited funds into a full kitchen renovation, including expensive new cabinets. But it might be worth the cash to paint your cabinets high-gloss white,” Tyson says.
As the first step in the agent-selection process, interview three candidates, asking each to critique your home and itemize cost-effective steps to make it more saleable, says Ashley Richardson, a long-time agent for the Long & Foster realty company.
“Find an experienced person who is personable and knows your neighborhood backwards and forwards,” she says.
-- Go on a junk-busting mission.
Many sellers feel overwhelmed by the magnitude of the tasks facing them. Richardson says those who can't handle all the projects can ask family members and friends to assist. If no volunteers step forward, she suggests they hire students or others looking for part-time work.
Delegate to the person you hire a series of manageable tasks.
“Tell them, for instance, to pack up the contents of your kitchen cabinets, a heavily loaded bookshelf or your bathroom countertops. All the items, most of which you won’t miss, can be packed in boxes and placed in neat stacks in your garage,” Richardson says.
Some people think it’s pointless for the owners of a home that’s sold “as is” to bother with the removal of clutter. But Richardson strongly disagrees.
“People simply can’t see how large your rooms are if they’re crowded with junk,” she says.
-- Give buyers a vision of your home’s potential.
If the house you’re selling is run-down, the odds are you don’t have enough money for major improvements. Even so, it’s important to make your place as attractive as possible.
“You won’t get buyers out to see your home in person unless it can pass the ‘online photo test.’ Everyone is now pre-screening property on their smartphone or computer,” Richardson says.
In addition to packing away clutter, you’ll want to cart out any furnishings or window coverings that seem drab or tired. These could be replaced with items borrowed from your agent.
“Realtors sometimes keep a stock of a few good furnishings -- including lamps, area rugs and paintings --that you can use during the showing period,” Richardson says.
In addition, the owners of an “as is” home should give visitors contractors’ estimates for necessary fixes -- like the replacement of a worn-out deck or the renovation of tile work in your master bath.
“Buyers routinely overestimate the cost of home improvement projects. You can help them to calculate the likely costs they’d face if they bought your fixer-upper,” Richardson says.
(To contact Ellen James Martin, email her at email@example.com.)