Buyers Want—and Expect—Sellers to Upgrade and Renovate Their Homes BEFORE the Sale

A large part of the previous real estate boom was focused on fix-up properties, giving buyers the opportunity to either flip them or create instant equity by remodeling or doing needed updates.

But not today’s buyer.

In a new trend reflecting this very different mindset, buyers in all age demographics want homes that are updated and need no renovation. They’re looking for properties that are move-in ready, and most important, they will pay for it.

In many cases, it’s a key demand, with many buyers telling their agents to eliminate older homes that have not been renovated. Younger buyers are typically short on cash, and after a twenty percent down payment and closing costs, the prospect of spending another thirty thousand to remodel a kitchen is completely off the table.

Here’s the real concern for sellers. Pricing your home at the upper end of the market conveys the strong message to buyers that your property is in updated and move-in-ready condition. And that includes cosmetic items as well.

Buyers who tour homes in need of new flooring, appliances, paint, general maintenance, or repair are going to be immediately turned off and eliminate the property from consideration—because they have no desire to negotiate the cost of remodeling and repair that, in their opinion, should have already been done to substantiate the price of the home.

What about sellers who can’t afford to renovate their property?

First and foremost, make sure the price reflects the condition. If newly remodeled homes of the same size and same location are selling for $300K, and your home needs a bath remodel and new kitchen appliances, get estimates for the work and price your property accordingly.

Finally, here’s a cautionary suggestion: Unless the cost of the upgrades are less than 5% percent of the purchase price, avoid offering buyers a credit or allowance for the needed renovation. Although this strategy allows the buyer the ability to finance the renovations and reduce out-of-pocket expenses after the sale, the property must appraise for the full purchase price. And if the contract includes a credit to replace outdated items or take care of needed repairs, the appraiser may note this and adjust the value accordingly.