Preparing a Home for Sale
(A continuation of How
to Sell a House)
By Steve Gillman - 2006
Cleaning is one of the obvious things you should do when you
are preparing a home for sale. Making any necessary repairs is
another. Of course you know this, but the problem is that it
is sometimes hard to be objective about how your home appears
to others.
You don't necessarily notice the dust on the ceiling fan when
you live with it. You might not spot the dirty switch plate covers.
Maybe there is the screen door that you haven't thought about,
because you know how to open it - but others struggle with it.
To solve this problem, show your home to someone who is more
objective and critical. Get a friend or family member who doesn't
spend a lot of time in your home to visit and inspect your home.
Tell them that you want them to pick the place apart, pointing
out every flaw, dirty spot and potential issue.
You even want to hear about the things you can't fix, so you'll
be ready when buyers ask about these things. Get estimates for
these repairs.
This will help you with things you might have missed, but
you'll want to systematically check out everything yourself as
well when preparing a home for sale. Here are some of the things
to inspect:
Neighborhood
Mailbox
Yard
Driveway
Outside Of Home
Garage
Entry
Basement
Living Room
Family Room
Bedrooms
Bathrooms
Kitchen
Laundry Room
Closets
Systems
Improvements
You can go beyond cleaning up and repairing your home if you
want to get even more for it. The next step is to add value by
improving it in various ways. What improvements should you make?
Start with a simple rule with which to start analyzing possible
improvements.
Return On Investment
Remember the true story from earlier? The young couple was
very disappointed when I told that the $40,000 they put into
remodeling the kitchen had added only $10,000 in value to the
house. This is a classic example of a bad return on investment.
To get not just a higher price, but more net profit when you
sell your house, you have do things which give the most "bang
for the buck." Try to aim for a three-to-one return on improvements.
In other words, if you're going to resurface the driveway for
$1000, it better raise the value of the home by $3,000.
Most of the time you'll just be guessing, but keep this three-to-one
formula in your head. There is no point in doing $5,000 worth
of improvements to net $5,000 more. Your time has value too.
If you spend $5,000 on improvements that you think will increase
the value of the home by $15,000, you could be off by half and
still make something for your effort. You can't say for sure,
and that is why you need a good margin of safety.
Better Guessing
When preparing a home for sale you can't really estimate the
increase in value from things like new curtains. What you can
do, though, is group together the many small improvements you
are considering, and imagine how the house will look when you
are done. Then you can estimate whether you will have increased
the value enough to justify the cost.
There is more about this on the following page...
The book continues here: Prepare
a House for Sale - More on maximum efficiency with improvements.
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