If you’re thinking about selling your home, you are probably seeing the mounting costs to do so. Thanks to inflation and supply issues, prices for just about everything—including building materials and appliances—are higher than last year.
When the market was red-hot, some people were able to sell without doing any renovations, even if they had dated homes. In many markets, that’s not the case anymore. Let’s look at today’s market and the cost of selling a home today.
The market is slowing.
The fact of the matter is that the real estate market is no longer red-hot. With mortgage rates climbing, applications for new mortgages are falling. Fewer people are looking to buy. In this shifting market, making your house as appealing as possible is crucial. Realtor.com tells us that “to stand out in the market, sellers should make their home attractive to buyers, which usually means some selective updates.”
Luxury is on the rise.
Luxury is trending in many markets, and the buyers who are still looking are expecting some nicer touches. It’s important to know what kind of updates your specific market demands. You can review real estate comps or go to some open houses around you to get a good idea of what’s popular and expected in your area. If you’d like your home to sell quickly, make sure that your home has those updates before listing.
Upgrades do not always have a good return on investment.
The slowing market and demand for updates can put sellers in a tough situation. Here’s why: many updates do not have a great return on investment (ROI). The National Association of Realtors 2022 Remodeling Impact Report is a great resource for current data on the ROI of various improvements.
This report lists several common updates and lists the typical percentage of cost recouped. Some updates are definitely worth the money; new wood flooring tends to recoup 118% of its cost, for example. With a new garage door or new roofing, the update will probably pay for itself but not make any money. Some other updates are not so beneficial. A kitchen upgrade may only recoup 67% of its cost, and a bathroom renovation only 71%.
Be aware that the updates needed to sell may not pay for themselves. You might put substantial time and money into your home just to be able to sell it, and that money might not be reflected in the sales price.
Distressed homes are even more costly to sell.
If your home is distressed, your situation may be even more difficult. You’ll have to make all necessary repairs first, of course—fixing everything up is the minimum. As we discussed before, though, the minimum isn’t enough anymore in this market. You’ll have to add some judicious updates onto your necessary repairs.
Even though lumber prices have come down from their extraordinary peaks in 2001 and 2002, not all of those price decreases are reflected at the retail level.
The good news is that if you decide that repairing and upgrading your home before selling isn’t worth the time and money, you may consider selling as-is. Be aware that selling as-is is not always as simple as it seems. Luckily, there’s one way to sell truly as-is and get cash for your distressed home—fast.
Work with MarketPro:
We’ll give you a fast cash offer for your current home just as it is now; no repairs, no upgrades, no inspection, no commissions or fees. You can even choose your exact closing date to coordinate perfectly with the purchase of your new home. Our team will walk you through your quote, including a review of what your home would likely bring on the open market.
If you’re in Washington, D.C., Maryland, Virginia, or Pennsylvania, we’d love to show you how easy and stress-free the sales process can be. Contact us today for a same-day, no-pressure quote.