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Upgrading your home to sell it
Old 04-14-2014, 05:11 PM   #1
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Upgrading your home to sell it

We live in a nice suburban neighborhood where a typical single family home (not a McMansion) sells for ~$650K and up. I've been keeping loose tabs on how real estate is moving in the neighborhood, though we have zero intentions of moving until my youngest heads off to college in a couple of years. Spring has arrived and this weekend I noticed that multiple homes went up for sale in our neighborhood - pretty normal for this time of year.

All of the houses put up for sale in the last few years, including the ones in the flyers this weekend have specific upgrades that we have not done to our house. This includes (1) granite counters in the kitchen, (2) hardwood throughout the main level at least, and (3) Stainless steel appliances.

I'm pretty cheap and we have retirement savings and college expenses going on. I don't necessarily want to spend money on any of the above items but I started thinking about my future competition in selling. If all the other houses have these, will we need them?

The last thing I want to do is have a real estate agent come into my house and tell me I need these upgrades in order to sell and then we put them in for someone else to enjoy. Forget that. Are there any real estate agents on here who can weigh in on this? If buyers expect that they get these things in houses in this area, am I at a huge disadvantage if I don't have them? Would offering a buyers credit for putting in granite and/or hardwood be as beneficial as having granite and/or hardwood put in first?

Again, I expect the earliest we would sell would be in about 3 years. We could stay here another 10 years. No firm plans right now.

We have significant equity in the home, if that makes any difference.
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Old 04-14-2014, 05:17 PM   #2
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I think your house will sell quicker and easier if these are done ahead of time. A large proportion of buyers want move-in ready and don't want to live in a construction zone or even manage the work even if they have been given the money for the improvements in form of a reduced sale price.

I would suggest that you make these improvements as you can over the next few years - that way you'll get the benefit of enjoying the improvements and it will be less of a bite when it comes time to sell.
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Old 04-14-2014, 05:24 PM   #3
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If it was me (and it has been me) I would:

1. Consider putting in the granite if your cabinets are of good quality. I remember when we were looking at houses and there was this house that had been on the market several months and apparently had gone on the market without granite. The owners finely put in the granite. It was an OK granite, but the thing was that the cabinets were really not very good. So, I just kept thinking that I was going to have to rip that granite out anyway.

Putting in granite is not anywhere near as expensive as much people think. In the last house we sold, he did have granite in the kitchen but in getting the house ready to sell we put in granite counters in the master bath and in the guest bath. This was very inexpensive to do.

2. I would consider putting in the stainless appliances particularly if your appliances are old. When we sold our house, it had an old cooktop and oven. We had already replaced our dishwasher with a stainless one awhile back. So we went ahead and replaced the other appliances with stainless. Now, had the cooktop, for example, been brand new but black I might not have done it.

3. I would not put in wood floors for a large amount of flooring since that is really expensive and people have personal tastes. Now if the foyer for example is an ugly, decrepit tile and is a small space, I might replace that tile with wood. But, I wouldn't spend thousands putting in wood throughout the house. I might however do things like replace carpet. Of course, if you would enjoy it for the next 2 years then you might.
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Old 04-14-2014, 05:33 PM   #4
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Granite and stainless are already going out of style according to some people in some areas (not me! I love my granite). If you sell 10 years from now, these beautiful upgrades may or may not be helpful.

At the risk of sounding as old as Methuselah, I remember when Harvest Gold appliances were a big plus for sellers.

So, it's hard for me to know what to recommend. I am sort of in the same situation as you, because I might (or might not) be selling my house in the next three years. I am just doing upgrades for myself right now. If I have to do other upgrades to sell it, then that is just part of the cost of selling.
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Old 04-14-2014, 05:42 PM   #5
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If you aren't interested in using for yourself what you think knowledgeable realtors would advise at this time, especially if you don't want to spend the money on it, I would wait until a year before you plan to sell and then ask one or two for some information at that time.

You don't have to do anything just because they recommend it. But I would listen very carefully to what they might recommend.
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Old 04-14-2014, 05:48 PM   #6
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Stainless steel appliances are on the way out (too easy to smudge, fingerprints,). Granite is OK, but the problem there is personal taste.

We bought our most recent home in November 2013 and chose one that had no upgrades and was 12 years old. Now we get to pick the upgrades (and we bought the house well under market because it had no upgrades).
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Old 04-14-2014, 05:56 PM   #7
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Stainless steel appliances are on the way out (too easy to smudge, fingerprints,). Granite is OK, but the problem there is personal taste.

We bought our most recent home in November 2013 and chose one that had no upgrades and was 12 years old. Now we get to pick the upgrades (and we bought the house well under market because it had no upgrades).

A house with no upgrades can be a very nice thing. For a buyer, who will pay well under market. A seller would probably have to factor this into the pricing, as well as the time the house might be on the market.
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Old 04-14-2014, 06:01 PM   #8
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A house with no upgrades can be a very nice thing. For a buyer, who will pay well under market. A seller would probably have to factor this into the pricing, as well as the time the house might be on the market.
We kind of lucked out as the house was in an estate and the executor (daughter) was selling from another state. Parents were dead a few years and the house was not used much after they passed. We made an offer about 15% under going price and was lucky to grab it.

The place still has the original Formica counters and builders carpet, which is in excellent shape.
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Old 04-14-2014, 06:47 PM   #9
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Upgrades to kitchens and bathrooms typically result in recouping about 50-60% of the amount spent once you do sell the home. So effectively plan on getting fifty cents on the dollar for your investments.

If you would enjoy the upgrades, think of it as getting the stuff for half price, since you will get half back when you sell. If you couldn't care less, then why spend $10K to get an additional $5K back when you eventually sell and move on?
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Old 04-14-2014, 07:01 PM   #10
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Upgrades to kitchens and bathrooms typically result in recouping about 50-60% of the amount spent once you do sell the home. So effectively plan on getting fifty cents on the dollar for your investments.

If you would enjoy the upgrades, think of it as getting the stuff for half price, since you will get half back when you sell. If you couldn't care less, then why spend $10K to get an additional $5K back when you eventually sell and move on?
Upgrades will lose you money if you do them solely for resale (ie. you get no return in terms of enjoyment). However, they'll probably expedite the sale of the house. So it really depends on what the demand for homes in your neighborhood will be at the time you sell, and how long you're willing to deal with having your house on the market.
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Old 04-14-2014, 07:10 PM   #11
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Upgrades to kitchens and bathrooms typically result in recouping about 50-60% of the amount spent once you do sell the home. So effectively plan on getting fifty cents on the dollar for your investments.
You don't do upgrades because you will make money on them. You do upgrades to get your house looked at and sold in a reasonable period of time and because people may want to discount the price too much otherwise. That is, they discount the price $10,000 when you could have done the expected upgrade for $5,000. I am talking about upgrades that are really the expected norm in the area/price range.
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Old 04-14-2014, 07:23 PM   #12
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The apartment building I lived in for the 5 years or so before I bought my condo was built in 1927, and had the original oak floors which everyone took good care of since we signed a separate lease for the floors, with separate penalties for damage. Pretty much everything else was original 1927 too, other than the vinyl composite tile in the kitchen and the appliances. Yet there were never any vacancies and the rents were quite high.

The reason is location. One of Seattle prettiest and wealthiest streets stretched 5 blocks from this building to a lovely large park overlooking downtown, Elliott Bay and the Olympics. It was one of 4 multifamily buildings on the street, all the rest being $1-5mm SFH. None of those horrible macmansions, these were actual urban mansions mostly built between WW1 and the depression. All within walking distance to the downtown core.The kitchen cabinets were painted steel, and in need of repainting. I think some manufacturer in Dayton OH once made them prior to the depression; he likely failed during the depression. I remember seeing them in apartments my parents owned in the 50's, and they were way out of date then.No dishwashers, thin party walls. No rental problems for my parents either because the apartments were surrounded by hospitals, a medical school and a large university. Plus excellent bus and light rail access.

In my current condo, I have no dishwasher although it is plumbed for it. The cabinets and overall storage in the unit is inadequate, the appliances are serviceable only, and the counters are too few and Formica.
Yet I could sell it easily because of huge very local demand for a condo with deeded parking, good building security, responsible neighbors, easy walk to downtown, hospitals, a large university, and uncountable entertainments, restaurants and other diversions.

It would be very hard for these advantages to be lost, while material upgrades deteriorate and lose cachet soon after they are put down.

I'd wait, unless you want the changes for yourself.

Ha
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Old 04-14-2014, 08:19 PM   #13
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There are several sites on the web that suggest which upgrades pay off. As a general rule, you can recoup some percentage of an upgrade. What upgrades do is allow a home to sell faster. However, a lower price will also cause it to sell faster. A very good example is landscaping. My father, a long term home appraiser, told me that they never give value to landscaping. Several reasons, but the major one is it could all die before the home sells, and a home is suppose to have some sort of landscaping.

Giving some thought to this, if an upgrade cost $10,000 and you can recoup $6,000. This would mean that if your house is $100,000 without upgrades, you will only get $106,000 for it with upgrade. You will loose $4,000 on the sale. So if you sold the non upgraded house for $96,000 you would be even. Question for your Real Estate agent is which will sell faster, the house at $110,000, $100,000 or $96,000 considering it's upgrade state. It's getting a little late here, and while I think this makes since, it might not tomorrow.
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Old 04-14-2014, 09:05 PM   #14
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Thanks Ha for bringing up location. My house needs the bathrooms updated and at least one will be done before my house goes on the market but what will sell my house is not granite & stainless steel but location. I have two and a half lots on Sarasota Bay . The view is postcard perfect & you can park your boat at my seawall which has been redone .
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Old 04-14-2014, 09:52 PM   #15
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I will tell you that, as a buyer, recent upgrades are a big red flag not an inducement. I would much rather see a house priced 5-10% under comps with original fixtures. I'm likely going to want to remodel to my own taste anyway and seeing all the fresh renovations just means I'll have to overpay for nothing.
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Old 04-15-2014, 06:31 AM   #16
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Having gone through the sale of a home that did not have upgrades (great neighborhood, schools, etc) that took months to sell and one that was upgraded that sold in days, I would do the later. It was lucky that it sold so quickly but there was no doubt that the easy move-in transition to the house left fewer questions for the buyer. They did not have to figure out the true value of the house, then the needed investment, etc. In our last house, we upgraded as soon as we moved in so we would enjoy it. If it were me, I would learn the current trends and make the upgrades. The goal would be for you to enjoy it for as long as you live there and leave the buyer with one purchase decision. Do not confusion to the sales effort with the price of the house and the cost of the upgrades.
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Old 04-15-2014, 06:41 AM   #17
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There is the trade off with upgrades versus selling price. If you don't personally want the upgrades, I would recommend waiting. When the time comes to sell, ask the realators when you interview them what they recommend. Styles change and markets are different at different times and for different price ranges and locations.

I certainly wouldn't pre-invest years before a contemplated move. As pointed out, styles change. Do the wrong thing now and you'll be looking at doing something different later.
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Old 04-15-2014, 06:59 AM   #18
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We generally try to make upgrades along the way that we can enjoy but that might also appeal to a general buyer's market. That way when it's time to sell we won't have to worry about whether a particular buyer will like a specific type of improvement we made. Having said that, everyone's different and no matter what you have, there will be some buyers that like what you did and others that won't. I think the most important thing is that the place looks clean and organized (well-staged), and not run down. With that first impression I think buyers can imagine the home with their own upgrades and special touches. Better to be a little underpriced than overpriced to make up for the improvements IMO.
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Old 04-15-2014, 07:17 AM   #19
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This guide from the National Association of Realtors may be helpful for you to see projected paybacks for different projects - NAR's Field Guide to Remodeling | realtor.org

Personally, I think the solid counters are something buyers in that price point are for sure going to want. That's the one thing you can't really quantify in these guides which is what is the expectation of buyers in the price point of homes they are comparing you against.
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Old 04-15-2014, 07:29 AM   #20
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You've had a lot of good advice, not here would be the key for me.........would you enjoy the upgrades? New ovens have features my DW loves.....warming trays, faster cooking speeds.....our new refrigerator has a better ice maker.....our dishwasher does a better job and is quieter.....and the whole kitchen looks better. .....In our new bathroom, we don't have the dank smell of years so use.....a better shower, a tub that cleans easier. So, my point is what enjoyment would you get now along with a better price later? If you're happy, leave it but as many have said, "you can't take it with you".....so I'd add enjoyment along with selling price after looking at other uses for your money. Good Luck, do what will put a smile on your face every day!
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