I've written on this subject before, you can find it HERE
What sparked a new incarnation for this title was a home I showed my client a few days ago...located in a desirable neighbourhood where there are not any similar homes on the market in the same price range & there hasn't been for some time.
The house is tenanted & as it so often happens when you're dealing with tenants, it took 3 tries plus a call to the listing agent in order to get an appointment confirmed to view it.
First, I'm going to do a run down (pun intended!) of the current state of the house & then what my recommendations would be for an owner to achieve a successful sale in this situation. And by successful I mean, how they could maximize the value of their investment property.
Current State Of Affairs:
-Exterior shows a lot of deferred maintenance with peeling paint in some areas, bad paint jobs in others (including overspray on the bricks), failing retaining wall & decking that needs to be replaced in both the front & the back.
-Inside is a bit of a blur with just the red flags standing out...clutter, locked rooms, surveillance cameras overseeing both the interior & exterior of the home, nausea-inducing air fresheners attempting to camouflage the smell of pot & a general sense of unease with the tenants looking on (they didn't leave for the showing) & a desire to get out of there as soon as possible!
What I'd do:
-Since the tenant has already given notice, I'd wait until they moved out
-I'd have a full crew lined up to give the place an overhaul as soon as they left...and I wouldn't worry about the lost rental income while that was being done. A full crew so that the turnaround time was as quick as possible to get it ready to go on the market
-Deferred maintenance issues would get priority & then inside, a fresh coat of paint throughout & a facelift for the kitchen
-A thorough cleaning, staging & well thought out marketing plan
-Hit the market with a bang
How To Do It:
-Work with a professional! Get advice on how to proceed from a REALTOR® who knows the target demographic, their expectations & home values in that specific neighbourhood, for that particular style of house.
-Most REALTORS® will have trusted resources they work with on a regular basis that they can recommend to help you execute the plan
-I'm not talking about sinking a ton of money into this project so don't get carried away & overspend...this comes back to working with a professional & getting the right advice!
-If you don't have the funds available to do this work...beg, steal or borrow them because it's THAT important!
-When the work is complete, be confident that you have done what you can to maximize the value of this asset & that the money you have spent will make a significant difference to your bottom line on closing day!
So back to the property in question, in it's current state...the owners WILL make money simply through the natural appreciation of the property, due to the overall appreciation in the market in the time that they've owned the home. But how much money COULD they have made if they'd chosen to go with the premise of spend a little money in order to make a LOT of money? We won't know THAT until we see a selling price & days on market for this property and be able to compare it to the recent sale of a similar property in the neighbourhood that HAS been maximized....
UPDATE:
The original post was written at the height of the spring market, at a time when inventory was very tight & we were seeing tremendous price growth for this type of home....3 or more bedrooms, 3 or more bathrooms & a double car garage.
The home that I wrote about took 25 days on the market to sell, when the average was 11 days, and sold for $41,000 less than the ONE & ONLY other comparable home that came on the market in that very desirable neighbourhood in those 25 days. And that one & only home that sold had 1 less bathroom, an unfinished basement & was not highly upgraded. And it's not like they pulled out all the stops either in terms of presentation - vacant, no staging - just an ok house on a nice street in a nice neighbourhood. And somebody was willing to pay $41,000 more for that one then have to deal with the issues associated with the first one.
The bottom line is spending between $5,000-$10,000 would have made them $30,000 or more...more because of the additional features the subject property had plus the very real difference that staging makes in a selling price.
So there you have it, real world results. There are certain principles in real estate that apply regardless of what the market is doing - don't make the same mistakes that this seller did & leave a LOT of money on the table!
Have a fabulous day!
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