MAXIMIZING YOUR HOME'S RESALE VALUE

Includes “A Month or Two Before Selling Your Home” and “The Day of The Showing”

(from Dina Petrakis’s seminar)

HOME IS THE SINGLE LARGEST INVESTMENT FOR MOST PEOPLE, SO ISN'T IT WORTH THE PLANNING AND EFFORT TO MAXIMIZE YOUR SELLING PRICE?

2 approaches discussed- long term planning for sale of the home, and the short term preparation for market.  Long term planning should still include short term prep, but the short term prep can be used alone to maximize your return. 

Long term planning will usually involve renovation/remodeling and a significant financial investment; short term planning for market can be free, if you're handy. 

In either case, MARKETING is the task at hand- selling your home requires asking the same questions that would be needed to market an automobile, or health care line, or food item. 

1) Who is the target market, and

2) What makes the target market buy?

AREA is a major determining factor in your target market.  Like the physical features of your home, the neighborhood characteristics which drew you to the home in the first place will probably appeal to similar age group, socioeconomic station, and etc.  AREA is also THE major determining factor in the value of your property. 

The old adage is true- LOCATION, LOCATION,  LOCATION.  This is the most important consideration in determining what is an appropriate level of expenditure in improving your home.

MARKET RESEARCH in your neighborhood is invaluable in making sure you don't spend too much money, or under-improve your property.  Get the Sunday paper, and attend OPEN HOUSES, of new and resale property in your immediate neighborhood, within a half-mile radius of your home.  Open houses  are your best tool- go to lots of them and see what types of improvements are being made, what listing prices are, what demographics is the property intended to serve, etc.  Educate yourself! 

Whirlpool tubs, granite kitchens, upscale fixtures may be a pretty safe bet or even critical factors to getting the top dollar possible, if most similar sized properties in the immediate area have them, but if they don't:  OVER-IMPROVEMENT may result.

Over improvement means that you spent more on the property than what you could "GET OUT" of it.  Sophisticated buyers don't want to buy a place that's overimproved for its area, AND people want to live near people of similar means but even if you DO get a buyer for the price you want, things will jam up when the bank or mortgage company has an appraisal of the property done. 

If the property is over-improved it won't "appraise out", because there won't be any comps, comparable sales in the area, and then the bank won't loan the full 80 or 90% to the buyer, and you could lose the buyer.  The consequences could be enormous- if the best market time for your target is past, for example.

Because our goal is to maximize our resale value, over-improvement is the worst possible outcome in the home improvement scenario.  When is it OK?  SWIMMING POOL example... people in general do NOT want a pool, perhaps because of the cost, or maintenance, or risk if they have children.  Again, our goal is to have a property which includes the largest number of potential buyers, and a pool would exclude buyers.

MORE BUYERS= BETTER NEGOTIATING POSITION

BIDET example:  Bidets are found on the Gold Coast in Chicago; putting one in your bathroom if you live anywhere else, is over improving.  This is info you get from going to open houses in your neighborhood.  Make your decisions based on the comps, (comparable properties) and you have the most control over the sale of your property.   Our goal in preparing the home for market, short or long term, is to make the property as appealing as possible to the largest possible group of people.

Who, specifically, would be your target?  Typically, your target market will be very like you in demographics, because the same things that make your home work for you will appeal to a similar buyer.   For example, if you live alone or with just your partner, your buyer will more likely not have children.  A family would not typically have their needs met by a home that is occupied by singles or empty nesters.  If you plan to sell to a demographic group different than your own, start thinking about the differences you need to provide for.  

3 rooms- KITCHEN, MASTER BATH, MASTER BEDROOM.  These are the ones where spending money for improvements can increase your selling price. 

In the long term preparation for market, changes necessary to appeal to the target market can be incorporated in to the home when making the changes necessary to your needs. 

Decorating can make a difference, with no physical changes: if you are targeting an Empty nester- fix up the 2nd bedroom as a tv room, study, or den, not as a bedroom

Working with this information, your needs over the time you intend to live in the home, you can develop a long-term plan for your home improvements and maximizing your  resale value.  The plan should detail all the features the home will have, and an approximate selling price for the home if it was ready to sell today. 

(If you are speculating that the area you have bought in will be appreciating through gentrification, this process gets more complicated, more risky, and possibly far more lucrative, but that is the subject of another course) 

ALL changes made should be examined carefully in terms of the future marketability, but of course you will be living in the home til then.  The property must suit your needs, most importantly!  The idea is, that you make decisions with open eyes, aware of the implications, and hopefully in such a way that you get the maximum enjoyment out of the property and sell it to its greatest advantage. 

Before we talk further about what everybody wants, what besides pools, are some of the items that you can't "get out"?  Special draperies or window treatments, deluxe wall and floor coverings, built-in furnishings, tennis courts, hot tubs, outdoor spas, ANY CHANGES EXCESSIVE TO THE NORM IN THE NEIGHBORHOOD.

So, what is it that everybody wants?  Comfort and convenience.  Plumbing, electrical, heating and cooling systems.  Kitchens and baths are very important today, and unless you totally ignore what your comps are doing, it would be hard to spend money foolishly in these rooms.  Whole magazines are devoted to their decoration.  Remember the rules of thumb, and the rooms that were discussed?  Master Bath, Master Bedroom, KITCHEN.  These are the biggies.  For many working people, Monday through Friday, the bed and bathrooms are the only ones they see, due to work schedules, so they have gotten bigger and better. People have started thinking of these rooms as retreat centers, more than just rooms in their houses.  Privacy of the master bedroom area is very desired, and will be an asset to your home if the comps support it.

Family rooms are far  more important than they used to be, as are master bedrooms and baths.  And, as lifestyles and entertainment habits get more and more casual, family rooms and kitchens are becoming the same room.  The National Association of Home Builder's national survey of home buyer's preferences, found that 16% wanted complete openness in their home's kitchen/fam room arrangement; 46 % want it to be visually open but with a divider, so"great rooms", a commonly used term for this combined area,  are a good inclusion in your plan.

Everyone loves fireplaces, and any broker will tell you that the places with fireplaces sell first.  They call it “sex appeal”, but whatever, a fireplace sells. 

Lots of windows, skylights, lots of storage, big closets, all should be on the list---especially in the three biggies, Master Bath, Master Bedroom, KITCHEN.

These items are tangible improvements that can be made to your property, but no matter what you do,  keep the psychological component of the home purchase in mind. 

What makes the particular target market buy is important, especially for long term planning, but more basic motivations, common to all buyers, need to be reckoned with.  

Beyond all the tangible improvements that you make to your property, are the most important changes of all- and these can be nuance, mere suggestion.  Simply put, people buy because their heartstrings are tugged, because somewhere inside a little voice says "this is the one", and they feel that they will live comfortably, happy, and prosper in the home.

Most of you, looking back at the decision you made when you bought your home(s), will find that the decision was not largely a rational one, that in fact it was more an emotional decision.  Something in the house grabbed you, and you possibly couldn't even put a finger on it.   

Valli Swerdlow found that most respondents picked one or more of the following as what had turned them on to their homes:

BRIGHTNESS,  SPACIOUSNESS,  PRIVACY,  AND   THE  APPEARANCE OF BEING MAINTENANCE FREE.

There are lots of tangible things we can do to elicit these feelings to maximize our selling price.  For example, brightness  very attractive to the buyer, so, simply open all your window treatments to maximize the light.  Turn on lights.  Use light colored paint, wall coverings, counters, and floors, to maximize the impression of light.  Spaciousness  is not something you can add in reality, but by removing clutter and getting rid of excess in drawers, cabinets and closets you can emphasize the room instead of the crowdedness.  Use of small prints in wallpaper and furnishings can also lend a feeling of space.  Mirrors will open up smaller areas. 

The appearance of being maintenance free is crucial, and much of the work we do in the next section will involve this characteristic.

Before we start to go through specific items to consider while you prepare for market, remember:  PEOPLE WILL PAY MORE FOR A PLACE THEY CAN MOVE IN TO WITHOUT ANY WORK.  "Red Carpet", or "MOVE IN CONDITION" is what most people want.  For a place that needs modification, even paint or cleaning, they want a discount, or worse yet, they just don't want it!!!

The other factor, related, which you must remember, is that people will not be able to see beyond the carpet that needs replacing, and probably can't even imagine what the place would look like with new carpet. SO, TAKE CARE OF ALL THE LITTLE DETAILS.  DON'T LEAVE ANYTHING UP TO THE IMAGINATION OF THE BUYER. 

FINALLY, TO REALLY GET DOGMATIC ABOUT  THIS, because this idea of the home that requires no change is really important, REMEMBER THAT MANY TARGET GROUPS JUST DON'T HAVE THE TIME TO DO ANY WORK ON THEIR HOME.  Some people, empty nesters, for example, may be moving specifically to reduce the work that their homes require.

If possible, put your home on the house tour of the neighborhood association, to start drawing attention to your home.  you will receive valuable feedback about the home, and possibly even create a buyer for your home!

SHORT TERM PREPARATION FOR MARKET

As stated earlier, this phase of market prep should be done by everyone, even if you've done a lot of long-term preparation and renovation for the sale.  Short term preparation doesn't have to take a lot of money, but to do it properly it will take time and the willingness to see your home from the buyer's perspective. 

This sounds easier than it really is, because after living in your home as long as you have makes the flaws invisible to you.  You have become used to the front door lock which requires that the key be pulled out a bit or perhaps jiggled before the tumblers will turn and allow entry.  The caved-in mark that Uncle Dan left on the wall when he did that trick for the kids years ago is not noticeable, or even has good memories and seems hard to part with.   The toilet that needs jiggling, so it doesn't run... believe me, the buyer will notice!

If you have some difficulty putting yourself in the buyer's place, you're not alone, but you need help.  Ask a trusted friend to walk through the house with you and tell you the scathing truth about everything.

Think like a buyer, and go through the house with a notebook.  Or, try taking photographs- this can be a good tool in helping see the home with the most objective eye possible.  From there, you can make a list of problems to correct, flaws to minimize, and positives to enhance, and we will go over some specifics.

PLEASE NOTE:::::This work should be done BEFORE you have any brokers in to talk about listing your property.  The brokerage community is professional, but still susceptible to the same influences that the buyer will be, so put your home in its best light before you start getting the experts in. 

You will have already gotten an idea of where you want to price your property, from the open houses that you have attended, but you very much need the broker to help you achieve your goals.    If they get a great first impression of your home, your chances are improved.  They and their colleagues are also more likely to show your home if they think it will sell quickly. 

Use all the tools at your disposal, and "sell" the home to the brokers first.  Then, pick a broker that seems best equipped to do the job, and keep the property gleaming in its best light til closing. 

Remember when going through your home that most people can't imagine what your home will look like with a coat of fresh paint, or new carpets.  Plan on having this work done before your list your property.  It may seem that the future buyer should have the choice of color, and allowing them to choose is best, but this will eliminate many buyers who would otherwise be interested in your home.  Select neutral colors and check your choices out with a couple of different people before making your decisions, and you will do far better than if you left the work for the buyer.

Starting at the curb with your notebook and a friend, if needed, look at your home's curb appeal.  These days many brokers will give a list of properties to their clients, from the MLS, and tell them to drive by and see which ones they want to have a showing of.  The curb appeal, how attractive your home looks from the street, can make the difference in how many people actually walk through your home.  If they don't like it enough to see the insides, they won't buy, and remember that we want to have the largest number of possible buyers. 

If your curb appeal needs a boost, landscaping may be a wise investment, even if it's just flats and flats of annuals to add lots of color.

Remember that we are looking for items which can be fixed, positives to enhance, and negatives to minimize.  To do this, we utilize what we know about the target market and the basic human emotions common to all.  Making the home seem bright, spacious, private, and easy to live in comes first.  From there, enhance positives (and thereby minimize negatives) by looking at the home, room by room, to determine the focal points, or positive features of each.  How are these maximized? 

Draw attention to them by arranging art groupings to attract the eye, use of rug, flowers, etc.  Sometimes the use of symmetry in a symmetrical room will give it a sense of order and beauty that the architect probably first envisioned.  Other times, symmetrical arrangements of furniture or art will draw attention to defects and asymmetry is the best choice.  Groupings with odd numbers are more forgiving.  In most cases, wall hangings should be centered approximately 5' or 5'6" from the ground, so that they are at eye level.  Try different arrangements and see if the way you have things arranged can be improved upon, and also remember to show your rooms used as your target market would use them.  Your furnishings aren't fixtures, and will not be included in the sale of the property, but you can assist the buyer in visualizing the place as his with the best use of your personal property.  Use mirrors to add light and to open up a small space, or connect two areas.

If your rooms are smaller, choppy, or have a lot of different trim etc.  going on, using the same paint treatments can make a big difference.  Also, I'm personally in favor of using a very good quality paint- I think you really can see the difference. 

Remember that the buyer only has a few clues to go by, and they will make the assumption, conscious or subconsciously, that if you haven't bothered to fix the leaky faucet or the doorknob that sticks, then you probably haven't taken care of the furnace or the roof, either.  To help you eliminate these negative messages, we will be going through specific tips at the end.

You also want to minimize the evidence of your presence in the house.  Help the prospective buyer imagine themselves in the house---remove personal items and anything that draws attention from the house and towards you.  Although homes which are occupied sell far faster than empty ones, because the buyer imagines easier, it really helps if the items in the place aren't personal.  You want to help the buyer imagine himself living their, and not throw any possible obstacle in their way.

Maximize space (or the impression of it) by minimizing clutter.  I had a garage sale and gave lots of stuff to charity before selling my home, which was small in room size, to maximize the room in my closets , cabinets, drawers, garage, etc.   

Be ruthless in clearing off your kitchen and bath counters!!!  Even if you have to pack things up and send them out to store, it is worth it.  The buyer will see crowded surfaces as a lack of spaciousness in your home, and look elsewhere- to where the seller cleared the surfaces.

Then, we work to eliminate negative messages arousing negative emotions about the property, the message that there will be work, or worse, trouble involved with the property.  Items needing fixing are the little things that can make a bad impression on the buyer and create the little nagging feelings that will cause them to look to the next property.  The idea that your home has a lot of deferred maintenance and will be a lot of trouble to keep up is what we want to at all costs avoid. 

 

 

LAST MONTH OR TWO BEFORE LISTING YOUR HOME

 

Exterior:

Front door- new coat of paint; polish hardware, lubricate hardware to ease operation.

Repair fences and planters; edge lawns; pull weeds; add spots of color in pots or planting beds at front door area and through gardens.  A weed killer at the beginning of the season may be advisable.  Trim shrubs.

Clean garage, basement, and walkways.  Clutter makes the largest area seem crowded..

Hose down air conditioner compressor.

Hose down house and touch up paint as required.  Make sure putty on wood windows is tight to the glass and sealed with paint.

Put windows and screens at same position, preferably closed, for consistent appearance.

 

Interior:

Remove personal photos and other items which personalize your home.  You want the buyer to imagine themselves in your home and it's easier for them to do so if you remove yourself from the scene.  Remove all religious and political items. 

Foyer- first impressions count!  Place an impressive piece of art, statuary, or a mirror here.

REMOVE EXCESS STUFF AND CLUTTER THROUGHOUT THE HOUSE!!!  MAXIMIZE EMPTY SPACE FOR THE IMPRESSION OF SPACIOUSNESS !

 

Repair or replace  ALL  broken knobs, fixtures, handles, squeaky doors, leaky faucets, etc. Make sure all switches work well. 

Review all linens, bed and bath, including rugs.  Pick out the best (fluffy, newest, neutral colored for showings, and get rid of the junk.  A bedspread is the single most noticeable thing in a bedroom- if yours isn't fabulous, buy a new one.  You will take it with you to your next home, as it is not a fixture. 

Caulk and grout in baths and kitchens should be perfectly clean.

Paint or paper where needed.  Remember that large patterned wallpaper can overwhelm a room.  Consider removal and repainting.  Spackle nail holes, touch up flat paint, shinier paints will need full wall painting.  Clean switch plates and surrounding walls.  Remove spider webs.

Review window treatments, removing worn, dated items.  Clean blinds.  Check all windows for easy operation

Clean:  walls, cabinets, counters, windows (professionally if possible), light fixtures, bulbs, inside of stove and fridge (IMMACULATELY!), exposed areas of furnace and water heater.  If your appliances are scratched or stained, consider electro-static painting.

Clean carpets and rugs.

Paint over graffiti, if necessary, and your neighbor’s, too. 

 

THE DAY OF THE SHOWING

it's  S H O W T I M E !

Do not be home during the showing-  to de-personalize your home- allow the buyer to visualize himself in your place.  You will be a distraction to that process.

Pets safely outside, or better yet, with you, away from the house.  Many people are afraid of or allergic to animals.  Pay special attention to  litterboxes and any possible odors.

If you have a fireplace, and it's seasonally feasible, have it going during showings and open houses. 

Hide all rakes, shovels, hoses, tools- they carry the message of the work your yard will mean to the buyer.  Let them focus on the enjoyment, instead.  Also remove toys and bikes. 

Open windows and burn candles before the showing to remove odors.  DO NOT DO ANY COOKING, even the night before.  Odors attractive to you or me may be repulsive to a prospective buyer.  They also personalize your space. 

On smells, in general:  Some people think that the smell of apple pie or baked bread is intoxicating and recommend it highly.  Potpourri and other methods are available to add scent your home, but my personal favorite is the "clean house" smell that comes from cleaning products like Murphy's Oil Soap and furniture polish, etc.  Interior merchandising firms will scent a model home with a woman's perfume chosen to appeal to the target market- JOY in expensive properties, less expensive perfumes in more modest developments.  But- perfume is tricky, clean is easy.