For Realtors: Explaining The Real Cost of Renovations to Clients

MarketPro Homebuyers Business Development Renovations

As a real estate professional, we don’t need to tell you about the importance of presentation when selling a home.

Buyers need to be able to picture themselves in the home and not think about all the work its going to take to get it clean, update it, or make it more comfortable for their lifestyle.

As a former real estate agent, I recognize cleaning up and staging a property should be at the top of the list to receive top dollar for a property.

Forbes published a great article on home staging this summer and really went into the pros and cons and how to potentially scale the staging to keep costs down.

And a recent National Association of Realtors (NAR) study revealed that:

·       82% of buyers’ agents said staging a home make it easier for a buyer to visualize the property as a future home.

·       23% of sellers’ agents said that home staging led to increased offers between 1% and 5% compared to similar homes that weren’t staged.

·       31% of sellers’ agents said that home staging greatly decreased the amount of time a home spent on the market.

All of this is to say how important the presentation of a home is in the selling process.

But what about those homes that need more than a coat of paint? What about those homeowners that don’t have the time or financial means to bring a home to market in a condition that would fetch top dollar?

A TV Show Isn’t Coming to Rescue Your House

We love home shows. The transformational change is so satisfying and everyone is happy at the end of the episode.

If we had one bone to pick with these shows it’s that they often gloss over the real costs of these types of projects. A cliffhanger before a commercial about how “this broken pipe could add $1,500 to my budget” seems dramatic. That $1,500 is only a reality if you have your own crew, and your job is to flip houses, and you don’t live in a place with a high cost of living like Washington DC, Virginia, Maryland, Pennsylvania and Florida.

Homeowners who think that renovations will be six-to-eight-weeks, that they can live comfortably in the home during the work and that someone is going to go the extra mile to really bring out the character of the home needs a reality check.

And then there is the cost.

This is the real reason we’re reaching out today. There has been a change in the marketplace that impacts anyone trying to fix up a home to go on the market.

Adding Up the Dollars and Cents

Overall, home renovation costs are spiking. Home renovation costs increased by 50% in 2020. When the 2021 numbers come out, we expect that those numbers will show an additional jump.

A study in late 2020 by the National Association of Home Builders showed that “22% percent of remodelers reported some shortage of vinyl siding, while 7% reported a serious shortage. In addition, 25% of remodelers reported material costs rose at a rate of 20% or more over the previous six months.”

Many of the reported shortages have resolved, but have been replaced by very long delivery times. Homeowners may have to wait additional weeks or months to get the materials they need; in the color they desire.

The bottom line is that the costs and timeline of home renovations are going to continue to be high and homeowners should weigh the financial impact of renovating the home they have or selling it and putting that money into the completed and updated home of their dreams.

As a leading homebuyer, we can be a resource to you and your clients.

If your client has a house that needs a new roof or a new foundation, if the kitchen needs to be gutted or there is orange shag carpet in the whole house, we want to buy it.

If your client inherits a house that they need to sell quickly so they don’t have to continue to pay the mortgage, we want to buy it.

If your client is making an offer on a new home and their current home hasn’t sold yet, we want to buy it and can do so on their timeline.

In some situations, we can even help you client with packing, moving, and other expenses. Plus, we have attractive referral incentives for your time and consideration.

If you have a client that is in need of a fast, fair cash offer on their house, please contact us today!

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