Should You Update Before Selling?

Full Video Transcript Below

[00:00:00] Well, good afternoon. Real estate fans, Alice Lema here, broker John L. Scott, Oregon here with another edition of my weekly podcast. Today, we're going to talk about if you should update your house before selling. I want the buyers to listen to this too, because there's some interesting twists on the kind of improvements that sellers choose to do, and buyers need to know how important some of these choices are if they're buying a house.

[00:00:30] Okay. But before we get started, want to give you a chance to subscribe to the channel, subscribe to the podcast, share it with your friends as an educational endeavor, want to make sure that I'm really helping. So please give us a, like a comment and pass the information on.

[00:00:46] Okay. Having said that, let's get going. Four things, sellers and buyers need to consider before a home gets updated. Okay. First and foremost, I'm going to start with mindset of the buyer. Number one, today's buyers now have been trained by the TV shows and also websites like Pinterest and some of the other ones.

[00:01:08] So when people walk into a property that they're considering buying, they already have this mindset that it should be completely updated. Perfect. Rehabilitated, move in ready, blah, blah, blah, blah, blah. So for the seller, you need to know that's what people are thinking when they walk in and they are hugely disappointed.

[00:01:27] Sometimes even outright upset if they don't get that experience, when they walk into your home. Now, buyers, you need to also understand that's not realistic. In most parts of the country, Southern Oregon included the majority of our properties are not up dated. They don't have quartz counters. They don't have new floors. They don't have granite. They don't have blah, blah, blah, blah, blah, blah, blah, open concept, vaulted ceiling especially in the lower price ranges. So it's just not realistic or fair when you're out shopping for a home, unless you're going to go up in price.

[00:02:00] It's just not fair to expect that. And it's not fair to get upset, but having said that, that's just how we all think. I watch those TV shows too. I'm addicted to at least 10 of them. I love them. But it does kind of warp your perception when you're out house hunting. So just be prepared. Okay. Sellers, just understand that's what people are expecting, whether it's realistic or not. Play ball with that and understand that's that's, who's going to be walking through your door.

[00:02:28] And if you're a buyer understand, that's really not fair and it's not realistic, but but we do understand that's what you're thinking. Cause we watched the same TV shows. Okay. So that's number one. Today's buyers are kind of pre-trained their mindset is for perfection because of all the media and all the TV shows.

[00:02:45] Number two. My number two is if you're going to consider upgrades improvements, enhancements, construction on the very best day of your life it's still unpleasant. So that's number two construction, even at its best is unpleasant. And I can say that from experience, but in my personal opinion, it's always been worth it. I have never had a construction project, not be worth it in my own real estate. And for most of my clients I think it's almost a hundred percent would agree, but we'd also all agree that it's terrible, terrible experience.

[00:03:19] So having said that construction at its best is unpleasant. So decide sellers, sit down and decide. Are you up for the disruption, even if you don't live in the house? It's going to be disrupted. If you've got to go over there, you've got to monitor people. You have to pick things, you have to order things.

[00:03:37] You might have to fix something that one of the contractors broke while they were doing the job on something else. They might've stood on your brand new toilet and rip the seat up. I've actually had people do that. It's terrible. I wish construction workers would stop using people's brand new toilets as ladders. Bring a ladder. You're a construction worker. You have one I know. Inyour truck. I saw it anyway.

[00:04:00] Assign yourself a person or plan on yourself, if you're going to do improvements of any kind. Plan on a time budget in your week to allocate that, treat it like a job folks, if you own property and you're going to do improvements, treat it like a job. Assign somebody to treat it like a job and plan on not only time, but emotional energy.

[00:04:23] And mental ability cause you still need to be professional with the workers or the whoever, or the neighbors that might get upset. You gotta be calm, you gotta be Zen. And that's not always easy during a construction project. So that's number two. Construction is unpleasant at its best. Assign time and emotional and mental energy in your day. Somebody has got to treat it like a job, even if you're not living there. Okay. That's number two.

[00:04:46] Number three, not all improvements are created equal. Not all improvements are worth it, especially if you're going to sell in the short-term. So, part of what I want to bring to your attention is this great graph that KCM came out with. KCM isone of my favorite data websites, keeping current matters. I mentioned them a lot, so they have this graph kind of like remodeling payback, percentage of cost recouped for common projects. And surprisingly enough the kitchen and bathroom remodel are not anywhere near the top of the list.

[00:05:18] Guess what? It's a new garage door. It's a deck, it's a new roof. And I am just so happy that they did this research and we can present it to you in this graph today because that's been my experience as well. And, you know, I had a client recently replaced their garage door and I think it was like 15 or $1,600. And it was the double size.

[00:05:37] It was one door, but it was two bays worth if you will. And it came with a brand new motor. Like $1,600. Locally it was a American door that did it. They were on time. They were great. Lovely. And the motor is almost silent. So amazing. The homeowner is so excited and now they're getting ready to sell.

[00:05:58] And so now I can brag on the listing that has a brand new motor and garage door. And you know, a lot of the buyer's agents they're clicking. I do this too. I click the garage door opener. I want to hear it. I want to see if it's shuddersor chatters, you know, like a lot of them do. I want to see if it works.

[00:06:14] So you're a garage store if you're selling, you know, is likely to get tested during the buyer's tour. So it doesn't hurt to have that and put it in the listing. And quite frankly, that was our number one, you know remodeling, payback from KCM. The other one is deck additions. Now, even before the pandemic deck additions were really popular, but now because of COVID and this and that.

[00:06:38] Evermore important cause we're extending our living space from inside to outside. So you get a lot of bang for your buck just by either adding a deck or redoing it and making it a little bit bigger, making it more solid, making it flatter, take out as many of those steps as you possibly can because then everybody in the homeowner's world can use it. The babies can use it. The grandma and grandpas can use it. People who might have trouble walking can use it. So there you go deck addition is number two.

[00:07:05] Number three roof replace it. I am so excited. I love new roofs. They're one of the smartest things a homeowner can do. So if you need a new roof or, you know, there's going to be one needed in three years or less, don't, don't skate on that.

[00:07:21] Just cough it up, put the new roof on, don't have the money, see if you can put it in the listing that here's the bid, I've got somebody hired. We'll pay out of escrow. We'll pay at the end, you know, work something out. But everybody loves a brand new roof. It makes them feel so, so secure and so good about their purchase and you'll sell your house faster and you'll get more money for it.

[00:07:43] So when you're looking at the top three items on this chart, they're all very practical. Right. They're not glamorous like the counter, you know, granite countertops and the soaking tub in the bathroom. So, and it's not to say that redoing your bathroom and kitchen are not important because they are, it's just, they're so expensive.

[00:08:02] So my number four. Is tiny. So if you time your improvements, especially if they're expensive, like complete redos of the bathroom or kitchen or both, then see if you can, you can do it earlier. Like a couple of years earlier, or the year before you put it on the market so that you can use it, get some benefit out of it and let the market, most markets appreciate a little bit every year even on a, on a slow year.

[00:08:32] And lately I appreciated a lot, but if you can absorb some of that cost over time, then your timing of the improvements. We'll be, we'll be you're recouping of the expense for the kitchen or bathroom remodel or update. You'll recruit more of that if you can wait a year or two. So my number four is timing.

[00:08:54] Timing is everything. If you're going to do something more expensive than a roof or. You know, a new garage door or a dock or something like that, that if you can plan ahead that you do that otherwise, you know, every house is going to be different. I think we would just have to talk to you specifically about the property you have and how we can do an update or something in a kitchen without you.

[00:09:20] Without losing money. You know, we, we do like to see these improvements be not only cost-effective, but see, get some bump out of it when you go on the market. And now that everybody and their dog seems to be listing their property, now it's ever more important. People are really having to compete. And so they're saying way really needed a new kitchen because I'm competing with people out there that have a new kitchen or a new bathroom, but you got to stop and run the numbers for yourself and see.

[00:09:47] Cost-wise and also because of the labor shortage and the supply shortage right now everything's inflated. And so you really, really got to run those numbers carefully and equate that to how much quicker is it going to say. When you go on the market in the next three to six months is what I'm assuming.

[00:10:05] Not only how much quicker, but how much more money are you going to get? You know, we're not in a buyer's market per se. We're just leveling off at least here in Southern Oregon, the only buyers market, the only bonafide buyer's market we have is the luxury market. And for us. Like $800,000 on it, but I know if you're from a big city, you're probably laughing, but but for us that's a bucket of money.

[00:10:26] So yeah, so that's number four. Timing is everything. See if you're going to do those more expensive updates to them the year or two before. And if not, then just run the numbers and see if it's really going to help you or not. Otherwise go back to practice. Practical is always best. You know, the other thing that's not on this list are windows.

[00:10:43] I love new windows. New windows are great. They're energy efficient. They look good and they make people, the buyers feel good. And again, that's more on the practical side. So those are some of the things that buyers and sellers can consider when improvements are being done to a home. And if you're selling.

[00:11:00] You got to think carefully about if it's worth it or not, because some things aren't, some things aren't. And then if you're buying, please understand the effort and money that the seller put into it. A new garage door is valuable, but it's not a $50,000 bump. Okay. A new kitchen is valuable and it probably is a $50,000 bump.

[00:11:21] But again, you know, if the other houses that are on the market, you know, price theirs lower and they have a new kitchen then buyer winds. And I think we're going to see more of that through our fall and winter selling season here in Southern Oregon. Okay. So those are my four tips. Let me know if there's anything I can do to help you with your real estate.

[00:11:41] My number is (541)301-7980 that's (541)301-7980. I'm around all weekend. I want to be your agent. I'm a great buyer's agent. I'm a great listing agent. Love working with investors, helping a lot of tenants lately, because we just don't have, you know, very many rentals anymore. A lot of tenants are getting pre-qualified.

[00:12:02] So having a ball with that, how many people will become, homeowners, whatever I can do to help. Give me a shout. Give me a text, have a beautiful weekend. We'll catch you again next week. Bye now.