Beware over improving your property when preparing to sell

Beware over improving - elegant kitchen and recessed lightsHome sellers know that certain fixes will give a good return on investment when selling. The risk, though, is in over improving your property.

Reasonable home sale prep will not over improve the home, but will include:

  • decluttering so that the home, garage, and yard all appear to offer enough comfortable space
  • deep cleaning, including the windows and  tracks
  • repairs to whatever is broken or not working properly, such as windows that don’t open and close smoothly, doorbells on the fritz, faucets that drip
  • often fresh paint and carpet are a good idea – case by case basis
  • frequently new light fixtures are helpful
  • sometimes removing window coverings to let more natural light in can be a good idea
  • sprucing up the yard, trimming bushes, planting something colorful near the front door

Strategic upgrades such as these prior to putting the home on the market will result in a faster sale at a better price in most markets.  Some sellers don’t want to do enough, whether it’s as basic as cleaning and decluttering or if it’s repairs that are imperative due to health or safety conditions.

Sometimes, though, we meet property owners with a bent toward the other extreme. When possible, we’ll do our best to get them to minimize their to do list since deep remodeling may cause a diminishing return, particularly when the market is soften and prices may be falling.

Over improving your property: how much is too much?

When the market is appreciating sharply, it may be possible to do a tremendous amount of work and get a fantastic return on it.
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Over improving a house for the neighborhood

Beware over improving a house or yard for the neighborhoodOver improving a house for the neighborhood is not a terribly uncommon happening. If you’re going to live somewhere for 30 years, you may not be worried about return on investment or overspending for the neighborhood so much as enjoyment of your property.

How do you know if you’re spending too much on your house, condo or townhouse?  How much is too much?

Over improving a house – some basic concepts

There are no hard and fast rules, but overall, it is best to not have the most expensive home on the street or in the area, either from added square footage, extreme remodeling or  using materials that are too expensive for the neighborhood. It is even worse if yours is the most expensive real estate by a wide margin – the wider it is, the worse!

There are two real estate principles which are helpful to know about and understand. The smaller, less improved or generally lower priced homes will pull down the value of a better home (that is the principle of regression).  Conversely, if your house or condo is less expensive than nearby homes, those more prices properties will raise your home’s value (the principle of progression).  In terms of getting the most back on your improvements, then, it’s best to make sure you can catch the tail wind of better properties and get pulled up by them, rather than have your improvements’ value pulled down by lesser properties.

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