A couple in their late 60s -- an American Express manager married to a landscape architect -- were highly motivated to retire and move to a beachfront condo in South Carolina. Standing in their way: the sale of their 1970s-era brick colonial.
To expedite the move, the couple swung into action with their own plan for pre-sale upgrades. Unfortunately, some of their well-intentioned “improvements” hindered rather than helped their sale, according to Ashley Richardson, who later became their listing agent.
“Before you go gung-ho on upgrades, call in local pros for expert opinions on what will truly enhance your sale without overspending,” says Richardson, who sells homes through the Long & Foster realty firm.
As it happened, she says the retiring couple wasted more than $20,000 on ill-advised upgrades. These included poorly planned kitchen changes, such as the installation of replacement countertops in black linoleum. The couple also brought in new carpeting to cover handsome hardwood floors.
“Buyers love hardwood, but they hate linoleum. As to the kitchen, their overwhelming preference is always for light quartz or granite,” she says.
After the retirees engaged her services as a listing agent, Richardson assisted them with a revised list of upgrades -- including flooring fixes and better kitchen countertops. It cost another $10,000, but the house sold just days after the extra work was done.
In many neighborhoods, demand for fairly priced residential properties continues to outstrip supply --keeping sellers in a strong position. That’s all the more reason why it can be unwise for owners to overspend on upgrades in hopes of increasing their profits.
Fred Meyer, a veteran real estate broker, says it’s rare for sellers to benefit from major pre-sale remodeling work.
Meyer, who also trained as a real estate appraiser, says one primary tenet of the appraisal field is that “cost does not equal value.” To illustrate, owners who spend $40,000 to install an in-ground swimming pool might at best reclaim only a fraction of that expenditure when their place is sold.
On the other hand, small landscaping upgrades that add color to the entrance of a home can repay sellers mightily.
“If you put in blooming flowers, you can expect to recover their cost at least 10 times over,” Meyer says. The same holds true for sellers who spend modestly to repaint their interior rooms in a pale neutral color, such as light gray.
Here are a few pointers for sellers:
-- Find an agent with substantial knowledge of your community.
What’s surprising to many sellers is that buyers differ widely in terms of which upgrades they prize most. For example, around Harvard University, where Meyer lists property, he says sellers are sometimes justified to install built-in bookshelves.
“Some professors joining the faculty actually put more of a premium on bookshelves than a snazzy kitchen,” he says.
Mark Nash, a real estate analyst and author of “1001 Tips for Buying and Selling a Home,” says owners who are unsure which improvements are worth doing are often reluctant to ask for advice before remodeling. But Nash says reputable agents won’t pressure you to list a property until you’re ready. Meanwhile, their advice could save you thousands of dollars in contractor charges.
“Real estate people can often put you in touch with local contractors who do good work for a low price. Through their clients, they pick up the names of contractors who are solid yet inexpensive,” Nash says.
Ask any agent who visits your home to go room to room, creating a checklist of updates that should enhance the value of your property rather than hurting it.
-- Don’t overshoot your neighbors on upgrades.
Nash says nowadays, buyers will refuse to compensate you for any renovation work that raises your property above neighborhood standards.
What kinds of upgrades constitute “overimprovement”? One example would be the addition of a three-car garage in a neighborhood where most houses have no garage at all.
-- Retreat from renovation work that’s overly pricey.
Have you already launched into a remodeling project, but fear you’re spending more than you could recoup? If so, Nash encourages you to contact your contractors and negotiate a change in plans.
Often, real estate agents can suggest less expensive products than those recommended by contractors. For example, they might recommend you replace worn carpet with a Home Depot brand rather than one from a designer showroom.
Besides substituting supplies, your contractors may be willing to renegotiate the overall scope of your project.
“Even after paying penalties for canceled work, you’ll probably come out ahead if you contain your enthusiasm for fancy upgrades,” Nash says.
(To contact Ellen James Martin, email her at email@example.com.)