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Sellers often ask me what repairs or upgardes to make before I list their home. The answer depends on what they expect to get back for any money invested.
My clients who listed and sold 3802 W 242nd in Torrance installed all new exotic Tiger Mahogany floors throughout the entire home and repainted the interior. Did it help sell? Yes. Did they recoup their entire investment? Not sure, but on that house it was worth the investment because the presentation helped to outweight whatever reservations buyers may have had.
I have two in escrow now, 12039 Wagner in Culver City and 402 S Walker in San Pedro that I am representing the buyers on. The sellers took radically different approaches to marketing these properties.
Wagner was extensively remodeled to the point that most of the interior of the nearly 100 year old house was almost new. The owners also did seismic work that went well beyond the required minimum. The owners also had exquisite taste in selecting paint colors and the house presented well.
Walker, is the other extreme entirely. Most of the work done, none of which was very recent, met any standard. Additionally, there are numerous visible dangers and hazards. To the extent that newer windows were installed, they probably have to be removed and entirely re-installed as well as the decaying poorly installed siding as well.
Fortunately, the buyer of Walker is prepared to do $100K of work to turn the house (which is fundamentally sound) into a more desirable living space. For the buyers of Wagner, their work is almost done. At the end of the day, each will represent good value at the full sunk price in their respective neghborhoods.
So, here's my advice for sellers.
1) Don't embark on projects that you don't have the budget to finish.
2) Get permits for any work. Often, you may be able to also update permits for work done previously at the same time.
3) The biggest ROI is on kithcens, bathrooms and anything that enhances curb appeal.
4) What can you do for little or no money to make the property more marketable? How about removing clutter, cleaning, letting in more sunlight, etc. Fesh coat of paint in a neutral color in the main rooms.
It is always important to ask yourself who your target customer is. Are you selling a fixer and have you priced as such? Is your home comparable to the condition of others in the same area? While you may not know who or where that buyer may come from, try to think through the situation and if you trust your agent enough to list your home with him/her, please listen to their advice on how to sell it as well.
You know all those Real Estate disclosures we give you whenever you are buying or selling? They are well worth reading because the old adage "buyer beware' has never been more appropriate than now when it comes to buying or selling real estate. Let me share 3 stories with you to illustrate the point.
Anyone who has spoken to me knows that I really don't like short sales. That was hammered home to two of my clients recently with fortunately avoided disasters.
The first one involves a triplex that may clients have been trying to buy as a short sale since May. This was advertised as a "bank approved" short. Well, we finanally get the letter approving the short sale from the first lien holder and stipulating a closing date of 9-25-2009 (or else).
In reviewing the mandatory disclosures, it comes to our attention that what was advertised as a triplex and even appeared in the tax records as a triplex was in fact a duplex. Whoops. The amazing thing is that the appraiser even came back with an appraisal as a triplex. But, it just isn't.
Once I informed the listing agents, who actually stepped up and handled this very professionally, as to what was happening, they resubmitted our addendum looking for a lower price to reflect the actual property condition and even got an appraiser there virtually the next day. Now, we are waiting to hear back from te negotiator.
The next short sale horror tale wasn't quite as nice.
After waiting for about 4-5 months, one of our clients was informed that her short sale offer for a property in San Pedro was accepted. Great. We then receive an "addendum" from the listing agent indicating that there was a third party involved in the transaction other than the bank. As it turns out, the listing agent somehow got another agent on her "team" on title with an option to buy the property. Their deal structure was in actuality a short sale flip. I don't know if this is legal, but I certainly would assume that the bank approving the short payoff would be less than amused to learn that the listing agent had another buyer lined up who would pay more. Didn't they used to call that "making a secret profit?"
And. here's the kicker. Fidelity won't even offer title insurance as they are sure this scenario, which apparently is becoming a widespread scam, will wind up in a class action lawsuit down the line.
But, enough about short sales. Let's talk termites.
The next day after taking possession of their new home, my clients send me the loevly picture below and ask as to whether these ae termites or not. We did get a termite clearance from a a reputable local company. As soon as I forwarded the picture, the owner of the company showed up at the property and stood behind his work. So, it is nice to know that there are people out there to whom integrity and honesty still means something.
