When selling your home you want to make the most money possible. Of course, that totally makes sense. The question is, how do you do that? Many people think earning top dollar means you need to renovate your home. However, the answer is not quite that simple. Deciding whether or not to renovate actually depends on what the market looks like and right now, the market is hot. Therefore, renovations might not be as necessary as they are in a more normal market. Here are two things to keep in mind if you want to sell your home.
1. Inventory Remains Critically Low
A normal real estate market has a 6-month supply of houses for sale. Right now, Long Beach has less than a two-month supply of homes overall. In February 2021, some areas had even less. As a result, buyer competition is extremely high and Long Beach homes are only spending an average of 27 days on the market. That is down an incredible 20.6% compared to February 2020. In the 90815 zip code, homes were only on the market for an average of 18 days last month. That’s a decrease of 51.4% compared to this time last year. Many homes receive multiple offers and bidding wars are common.
Clearly, the market is extremely competitive and moving very quickly right now. So if you want to sell your home, now is the time. Spending costly time and money to renovate your home could mean missing out on this window of opportunity.
Does This Mean No Renovations Are Necessary?
Yes and no. Certain repairs on your home may be important, but this is something your real estate agent can help with. Your agent can help you decide which improvements are crucial and which ones probably won’t be dealbreakers for potential buyers.
Right now, buyers are somewhat desperate. If a home comes on the market that is totally fixed up, it’s almost guaranteed it will create a bidding war. Therefore, buyers are more willing to take on home improvement projects themselves if it means getting into a home. So keep this in mind when deciding whether or not to renovate your home.
According to Home Advisor:
“When it comes to the number of home improvement projects completed, Gen Z homeowners are leading the pack, completing an average of 3.5 projects. Millennials closely follow Gen Z, taking on an average of 3.3 projects, followed by Gen X at 2.8 projects. Boomers completed an average of 2 projects, and the Silent Generation completed the fewest projects, on average, at 1.8 per household. Compared to 2019, millennials are spending 60% more on home improvement and doing on average 30% more projects.”
Let the Buyer Take on Renovations
In this market, it may be wise to let future homeowners remodel the bathroom or the kitchen to make design decisions that are best for their specific taste and lifestyle. As a seller, your dollars and time might be better spent working on small cosmetic updates, like refreshing some paint and power washing the exterior. Instead of over-investing in your home with upgrades that the buyers may change anyway, work with a real estate professional to determine the key projects that will maximize your listing, without overdoing it.
2. Focus on Getting a Good ROI
You want to sell your home in the least amount of time and for the most amount of money possible. While it may seem that renovating your home is the best way to do this, that may not be the case. When planning any bigger projects to tackle, you and your real estate agent will want to discuss the potential return on your investment and if those projects are worth the cost. Some homes do need a kitchen or bathroom renovation, roof repairs, or other major work, but definitely not all of them. In fact, you might be surprised by how well your house could fair in today’s sellers’ market.
Ideally, homeowners getting ready to move should try to avoid over-investing in big renovations if they won’t make that money back when they sell their house. According to the 2020 State of Home Spending report from Home Advisor:
“The average household spending on home services rose to $13,138, an increase over last year’s survey results, where homeowners who did projects spent $9,081 on average in 2019.”
Case Study: 4044 E. 14th Street
Before you renovate your home, take a look at this case study from a home we recently sold. When we first started talking to the sellers at 4044 E. 14th Street, they were considering a kitchen renovation before selling. However, once we as real estate experts saw the home, we had a different idea. Renovating the home would have been expensive. According to Home Depot, even a minor kitchen remodel can cost 24,000! Instead, we suggested they spend $1,500 on staging. Even better, the sellers were able to pay out of escrow.
The decision to stage instead of renovate paid off. The home was listed at $719,000 but closed at $780,000 – 108% of the list price! The staging allowed the new homeowners to see the potential in the home. Yet, now they have the ability to renovate it the way they want and using their vision.
You can watch the professional video tour of 4044 E. 14th Street and check out the staging below. To learn more about the home, please click here.
If you’re interested in learning more about staging, check out these other blog posts:
Ready to Renovate or Ready to Sell?
If you want to renovate your home before selling, contact a local real estate professional like The Shannon Jones Team. You may be surprised to find out a renovation is not the best course of action. Instead, it’s possible that putting your house on the market as-is will help you sell quickly, and result in the best return on your investment. Every home is different, but a conversation with your agent is mission-critical to make sure you make the right moves when selling this season.
We’re in a strong sellers’ market, and that means you have the leverage to sell your house on your terms. Let’s connect today to determine if renovating your home is really the best way to spend your time and money before you sell. Please fill out the form below to get started, or give us a call at 562.896.2456.