Planning and Budgeting to Sell Your Silicon Valley Home
Preparing your San Jose area home to sell should be done enough in advance of when you want to have your home go on the market that any unplanned repairs can be completed first (without a lot of time pressures) so that you net the most money possible from the sale. It’s hard to know how much time to allow for the unknown, but my suggestion is to provide yourself a month or two, if possible. Three is even better. If you want to sell this upcoming spring, it’s smart to get started on your plan now.
In Santa Clara County, we have very mild winters and it’s not usually difficult to get most repairs & remodeling done even in winter (unless they are “outside” repairs and we’re in the middle of a rare El Nino year). If you start now, you should have no trouble finding inspectors (presale inspections are more than just a good idea!) and contractors. If you wait ’til March, you may not be on the schedule of your own choosing.
So where to start? What to budget?
In my experience, most Silicon Valley homes that have been lived in for many years often have 1 – 2 % of the value of the home needed in repairs, landscape freshening and staging prior to going on the market. The longer you’ve been in the home without doing periodic inspections for termites and other pests, on the roof or structure of the home, the more likely that number will creep upwards. If your home is young and you’ve been there a short while, chances are good that this doesn’t apply to you.
In 2006 I sold a home in the Cambrian Park area of San Jose in which the sellers had not lived there even a decade and their expenses reached 3%. The reason? A large chunk of that is because it appears that in the past, contractors put good material down over wood members infected with dry rot (a floor in one room and a roof). That’s expensive! This was extreme.
In many cases, if you have a home worth appx. $1 million (to use round numbers), plan on spending $10,000 to $20,000 on repairs, improvements, and “lipstick and rouge” to make your home show well if you have been there 10 years or more without any real remodeling or repairs done. Been there a lot longer, and the home is much older? Plan on more.
Where does the money go?
First, you want to have pre-sale inspections done, that is, inspections which you order so that you know the condition of the property that you’re selling. This is before the home is ever on the market so that you can make repairs, if needed, upfront. For example, let’s say there’s dry rot in the bathroom but you don’t know it. If you sell unaware of it, you may end up having to repair the floor when the buyer finds it later. But if you do it before a buyer is ever on scene, you can fix it but then market the home with an updated bathroom. This is a longer discussion and there are many reasons why it’s the norm in Santa Clara County for sellers to have their property inspected once the sellers hire their Realtor or other licensee, but the short answer is this: in the long run, it saves you, the seller, money.
Often the biggest or most expensive repairs are going to pest and termite work (drywood termites, subterranean termites, dry rot, fungus, etc.). If you have drywood termites in more than 1 place, you’ll probably end up needing to tent (fumigate) the house – though you may be able to wait on that until the very end of the escrow or sale.
Bathrooms with dry rot can get expensive in a hurry. Especially if you have tile, or if the damage is extensive. Many years ago I sold a home in Sunnyvale in which the one bathroom originally had only a tub. The grown kids decided to do mom a favor and plumb in a shower themselves while she was away on vacation. Little did they know that there was a leak inside. When mom was ready to sell, we discovered the problem and the damage was incredible – it went from the shower to the outside stucco wall. That house had no termites, but about 2% of the value of the home at that time in water damage and dry rot to the bathroom. (It was so bad that the termite company asked me to please go look at it with my own eyes – I did – it was incredible.)
Other big ticket items can include electrical (which buyers feel strongly about), roofs and foundations.
Back in the “hot sellers market” years of the early 2000s, many many people bought their homes “AS IS” in Los Gatos, Saratoga, Almaden Valley, Cupertino, and all over San Jose and Silicon Valley. Many of those sellers and buyers never did the fixes that should have happened back when they bought. Consequently, a lot of homes now being prepared for the market have badly deferred maintenance and expensive repairs required by the current real estate sales climate.
In other words, you may not have been able to make the seller fix it 5 years ago, but now the buyer will expect you to fix it (and in most cases can insist). What was not done then will likely have to be done now.
What about staging?
The first, and most important, part of staging is decluttering. (This is the hardest part, too.) You probably want to do at least the de-cluttering before having your pre-sale inspections so that the various inspectors can see what needs to be seen. Most of us live with too much stuff in our homes. Selling is a great reason to thin out your unneeded possessions and give some to charity, throw others out, or possibly have a garage sale.
If there are things you won’t need for the next 6 months but want to keep, think storage. My favorite resource for this is Door-to-Door. They bring a pod to your driveway, you load it, and they bring it back to you either after you move (if it’s a local move) or when a regular moving truck comes to move you a long distance.
It is helpful to work with a real estate practitioner who’s skilled in staging to help decide what should go and what should stay. If you can choose your Realtor early in the process, which I do suggest, then enlist him or her to assist you with this decision making process.
Next is the fine-tuning, rearranging, or replacing of things which will net you more than they cost. The biggest ticket items, where you get the most bang for your buck, tend to be in floorcovering and wall covering (carpet and paint, or removal of carpet and exposing the hardwood if there is any, removing of old wallpaper, etc.). Also high on the good-return list is spruced up landscaping in the front yard. You need to get them in the door before they can buy the house, so make it appealing enough that they want to see more!
Each home is different and so is each need and budget. A good, seasoned agent can help you to spend as little as possible while reaping the most benefit as a seller. If you start early, you can get the process going when there’s less competition and less stress.
Selling your Silicon Valley home in the first half of 2008? Call me now, in December, and we can take care of a few things like ordering pre-sale inspections during the ‘slow time’ for the inspectors. (The inspections can all happen on the same morning or afternoon in most cases, so it doesn’t really take much of your time.) Hopefully they won’t find anything and you will have peace of mind. But if they do, you can address it early on and be ready to hit the market the day after the SuperBowl (often a good time) or whenever you want.
Wishing you a very happy holiday season!
(in addition to having other designations, I am also an Accredited Staging Professional)
cell 408 204-7673