bridge1.png

Remodeling – buy for less, sell for more

by sfishome on July 31, 2006

Buying a home for less can be compared to buying a car for less. Buy last year’s model, and be willing to walk away during negotiations. Last year’s model can be just that. In the SOMA/South Beach/Mission Bay where all the new construction is going up, you can buy a condo in a building that was “hot” last year, or 5 years ago. There is so much new construction, that there is a glut of inventory, and older condos aren’t as interesting to most buyers. But this year’s new construction is next year’s old news, so why pay a premium when it will just be old next year?

Most of the rest of the city where there is hardly any new construction, you can look for non-remodeled, older condition homes. The trick is to find something that looks terrible, but is structurely sound. A home that smells is a perfect example. Most buyers just walk out. But most smells can usually be eliminated by getting rid of an old carpet and repainting and cleaning up.

When it comes to remodeling, you must think about whether you are remodeling for yourself, or remodeling to sell at a profit. A recent Seller of mine did a $100,000 remodel that was entirely to her taste, and not necessarily what the majority of Buyers would want. I estimated she got about $20,000 in value out of her remodel, and then she needed to sell 1.5 years later so she barely enjoyed her remodeled home. She probably could have spent $20,000 on her remodel, and gotten $30,000 or $40,000 out of it has she done it in a more generic way.

So go ahead and get hardwood floors, but you can buy good looking ones that cost less, not the highest end, and still get full value out of them. Get your home painted just before you sell, but find the cheapest painter, not the one who says he’s worth more, because he really isn’t when it comes to selling the home. Don’t get the highest end appliances for your kitchen, get ones that look good, but cost less. Don’t get custom granite counters, get the ones on sale. Don’t change the structure of your home unless it will dramatically improve the value of your home.

Your goal is for it to “show” well, and cost you the least possible. When you buy, look for homes that just need these cosmetic upgrades, and find the cheapest ways of getting the work done. Then spend a couple of thousand dollars on staging, and that will make the home look even better, and sell for more. Again, take the opposite advice when buying… buy unstaged homes, that need paint. They will sell for less even though their value is virtually the same as a staged home that has been newly painted.

Leave a Comment

Previous post:

Next post: