Buyers have two choices when it comes to selling their homes. They can choose to put them on the market "as is," or renovate. Selling as is can be a risky proposition if the home is in need of numerous repairs. While it can generate a high ROI, renovating the property can be time-consuming and expensive. The good news is that analyzing market trends will help homeowners to determine whether it is better to sell a house as is or complete a renovation before it goes on the market.
Step 1. Analyze Both Real Estate Markets
Selling a home is one thing; purchasing a new home in an entirely different market is another story. Homeowners that are selling a home, but have already purchased another home, should carefully assess both local real estate markets before they take on the challenge of a renovation. For example, if the for sale home is in a seller's market, then the lack of inventory can give the homeowner the leeway they need to make minimal improvements to maximize ROI and decrease the days spent on market. However, if the sale home is in a buyer's market, then the homeowner will have to carefully weigh whether they a) have the money needed to make home improvements, and b) if the for sale house should still be considered an investment that warrants additional time and finances.
Step 2. Analyze The ROI For Necessary Projects
It's no secret that certain home improvement projects generate higher ROIs than others. According to the National Association of Realtors, upgraded bathrooms and kitchens are most likely to generate high ROIs. On a smaller scale, enhancing the curb appeal of the home can do wonders to expedite the sale and slightly increase its value. In order to decide if the home should be sold as is, or renovated, homeowners will have to carefully asses the likelihood that their home improvement projects will be completed on time, increase the value of the home, appeal to more buyers, and generate a positive ROI. After all, if the land is far more valuable than the house that sits on it, homeowners will be better off selling the property as it stands, rather than revamping it only to see it torn down as soon as the sale is finalized.
Step 3. Analyze National Construction Trends
The final step in determining if the house should be sold as is, or renovated, is to analyze national construction trends. What is the percentage of new homes being built and sold? Are home improvement projects leaning towards new chef's kitchen or elegantly stated outdoor seating areas? Can you identify certain styles that are trending? The key to remember is that renovating a home to sell it is far different than improving it for the homeowner to continue to enjoy. By analyzing national construction trends, homeowners can better determine a) what projects can be completed within their timeline and budget, and b) what projects will increase the value of their home and appeal to buyers on a national scale.
The Bottom Line: Work with a Team of Professionals to Determine the Best Course of Action
Sellers markets can pave the way for selling a home as is. However, selling a home that needs extensive repairs will still result in a lower price regardless of the status of the market. The good news is that by working with a team of professionals to analyze the local real estate markets, the ROI for potential renovations, and the national construction trends, homeowners will be able to determine the best course of action. Contact Velocity Title today to discover the traction that you need to succeed whether you choose to sell your home as is or spring for a renovation.