You may want to read the previous chapter on the importance of knowing your reasons to sell here.
It is never too early to start the preparation phase. In the beginning, it is best to look at the house from a buyer’s perspective. When you visit your family and friends, take note of the features of their home that you like and ones that you don’t. Granted, your friends’ houses will be full of personal possessions and decor, since they are living in them – try to disregard those items, as you will likely have to remove some of your own personal items from your house when it’s on the market. But let’s talk about staging your house a little later.
Photo by Stephanie Kilgast
What you ought to be looking for, when touring your own home objectively, are the big-picture things: features that need to be repaired, replaced, painted, cleaned, or disposed of. Orchestrate a schedule of fixes with your family, so that everybody knows when to clean up their rooms and how to help out. It is wise to start with the maintenance work as soon as you can, so you can complete small jobs piecemeal and without much hassle. If you find bigger problems in the process, you will have enough time to correct them before the first buyers start pouring in.
Don’t hesitate to ask your real estate agent for her or his favourite spruce-up tips.
Renovation, Repairs and Upgrades
Photo by MotorBoat4107
If you do your homework properly, prospective buyers won’t have much reason – or desire – to haggle on price. If you know that some areas of your house may require a buyer’s investment after the purchase, you can adjust your asking price so that it properly reflects your home’s condition as compared to other, similar homes in your local market.
This approach (leaving issues unfixed but reflecting them in your asking price) may be useful when you are not sure how the buyer might want the issue amended, the room painted, or the roof replaced. It is always professional to acknowledge the issue (with the help of your Realtor®, who may choose to market your home as ‘untouched’) so everything is out on the table for the buyer to decide.
Whereas improving the value for your buyer by upgrading can be a great way to push the sale price up, be wary of large-scale personalization or customization. The last thing you want to do is undertake an ambitious, costly colour scheme throughout the house, only to discover this is a deal-breaker for your prospective buyer, who would have preferred a neutral palette and doesn’t want to have to change things back.
When you do repairs or renovations, always document them and keep the receipts from the professionals you call in.
Read on to find out more about the do’s and don’ts of repairs and upgrades, and for valuable advice on selling your home ‘as is’.
Green is Cool
Photo by iamos
You’ve heard about it everywhere, now it’s time to apply it: going green is ‘in’ these days. Many people will be enticed by the fact that you are selling a well-insulated, energy efficient, solar-panel-equipped house. Don’t use chemicals to treat and protect your garden, grass and trees (they’re illegal in some areas anyway) and make sure that your visitors know about this. Replace your old and rusty hot water heater with an on-demand one and let the buyers know that the façade was painted using an environmentally friendly brand of paint.
We are sure you can approach a green enthusiast in your vicinity (or your real estate agent) for yet more tips on going green.
The Theory of Relativity
Photo by an untrained eye
If you ever wondered what is going on in the heads of buyers when they come to your neighbourhood, consider this:
- The buyer will start looking for the least expensive house in the best neighbourhood within his or her price range.
- The buyer will have a set of minimal standards that he or she wants to see in the house. The neighbourhood is still more important than the actual house though.
- The buyer will be happy if the house is comparable or slightly better than the neighbouring properties. Such ‘market positioning’ will likely earn you a premium.
- The buyer will not pay you a premium if your house is clearly inferior to the neighbouring properties.
The last two points are very important to keep in mind. As humans, we are very prone to comparing everything to the closest possible match. Therefore, it is important that you make all the necessary repairs and upgrades to keep up with the Joneses, but any lengths you go to beyond that might only contribute slightly to the prospective buyer’s appreciation of your house. We know of a seller who laid an imported tile floor in the foyer that cost many thousands of dollars, hoping to really ‘WOW’ buyers with a great first impression. He was disappointed to find that most buyers seemed merely pleased by the new and shiny flooring, but did not appreciate the one-of-a-kind aspects of it at all. Worst of all, the buyers were not willing to pay a hefty premium for a house with an imported tile floor!
The mere fact that you renovated more recently than your neighbours can give you that shade of advantage that warrants a premium – even if all you did was paint and put in a few new windows. The buyer is really concerned with the neighbourhood and just wants to own a house that is regarded as being up to par in the community. They will often add their own upgrades and renovate to their own tastes once they have ownership.
If you already have the only swimming pool on the street, or some other unique feature, you don’t have to push any further. Additional features are great, but investing in them probably won’t bring the desired return on investment since your house already stands out as it is.
Not keeping up with the neighbours, on the other hand, (i.e. letting your home fall into dated-ness or decline) has its own risks. It will usually shed negative light on your property and could permanently affect its marketability. Although there may be nothing seriously wrong with it, your home could get branded as ‘a gut job’ or a ‘teardown’ and sit on the market for much longer than it has to. When someone does bite, the buyer might feel as if they are already doing you a favour by accepting the inferior condition of your house, and they could be more reluctant to make concessions on price and terms to make up for it.
Now that you know more about improving the market value of your home, learn what not to do before you sell.
If you find this guide helpful and want to read about more tips, sign up and get the Pdf printable version of our Free Report on Buying and Selling Your First Home in Toronto!