When it comes to older homes, there is a big move in most inner cities, to revitalize certain pockets within town. This is often done one of 2 ways. You can either renovate your home then sell it, or just sell it and let someone decide if they want to renovate or just flat out bulldoze and rebuild a new home. When selling your home in one of these areas, we often hear questions from sellers asking if a renovation is worth the money and hassle and if it will ultimately help them sell their home quicker and for more cash then it would currently get on the market.
So how do you know when to rebuild, remodel, or renovate? Our breakdown below gives you a good understanding of what the market will bear in your area. If you have more questions, feel free to give us a call to discuss your specific situation, 855.866.8339.
First some homework.
We talk about CMA (comparative market analysis) all the time, and here is another time in which you should start with a CMA. For more info on what a CMA is, and how to get one, click here. Read that, then come back, if you already know what a CMA is, keep reading.
We can’t stress enough how important a strict apples to apples comparison is when establishing the case for a Renovation/Remodel or rebuild. You, or your broker, should make 3 lists.
- Brand new homes on similar lot sizes as yours. The type or style of home doesn’t matter, your just trying to see how much home people are building on lots that are the same size/location as yours.
- Homes on the market that are of the same age and size, but that have been renovated. Be sure to list out the features of the home that are upgraded over yours, if it has an upgraded kitchen and yours doesn’t then mark it down. Upgraded master bath, mark it down.
- Homes on the market that are same age and size, but not upgraded. Again, the most important things to look at are date and age of home. You need to compare homes that as as similar to yours as possible.
Now that you have all your data and done all your homework, your ready to move forward.
The case for Renovating.
There are 2 important factors to consider.
- How much are rebuilds going for (list 1) over non-renovated homes (list 3). If rebuilds are going for 3 times as much then you should skip the rest of this article and sell your home, without making any modifications, now. There is a very strong case that you could even start a bidding war just by putting your house on the MLS. Make sure your using a Flat Fee MLS service to maximize the equity you retain. We have Flat fee MLS packages geared to all types of sellers from the investor to the novice that you can check out here.
- If rebuilds are not going for 3 times a non renovated home, then you need to look at the number of renovations/remodels in the area that have sold on the MLS in the last 6 months. From here you need to compare the differences you noted in your second list. Lets say you are comparing your home for which a CMA came in @ $200,000, to another home that had a kitchen and master bath remodel and sold for $275,000. You need to price out the feature upgrades to see if the cost of a kitchen and master bath upgrade makes sense for $75,000 dollars more. Remodels can cost a significant amount of money, and when your ready to sell, you should get the piece of mind and savings that comes with using LystHouse Flat Fee MLS listing services.
Its best to get a broker in your area who can assist with making all the evaluations necessary. Depending on the age of your home, there could be a lot of unknowns that you need to take into consideration. LystHouse would love to help, call 855.866.8339 or sign-up to get a free broker consultation today.
As always, we love comments, feedback and questions. Let us show you how we can help make your home selling experience easier and painless with LystHouse.