Being able to estimate renovation costs for home updates is impactful for both the buyer and the seller side. When working with buyers, they may see a home they’re interested in online but they’re concerned that the updates they desire won’t fit within their budget. They may overestimate the costs required for those updates, and perhaps won’t consider homes at a higher price point because of this inaccurate information.
When working with sellers, being able to estimate accurate renovation costs will help to convince the seller to set a more realistic listing price. Moreover, updating a home will help it to sell much more quickly. Sellers typically don’t have a realistic idea of the actual costs of updating their home. Setting up some estimates from contractors will go a long way toward educating your client about the actual costs of updating their home, and will help you to become even more of a subject matter expert as a seller’s agent.
Convincing sellers to make the updates that buyers want is a little more difficult in today’s market. Ten years ago, when the house down the street with the same square footage and the same floor plan sold for a higher price, it didn’t matter if that house had updates that yours didn’t, because you couldn’t see them without going inside the house itself. Nowadays the impact of the internet and the syndication of listings with tons of photos has made price per square foot comparisons irrelevant.
Buyers can see the upgrades they want, and if the listing doesn’t have those upgrades, the offered price will be discounted accordingly.
When considering what to update and upgrade, price ranges and impacts on the buyer should be considered. Buyers make a decision based on emotion within the first 7 steps inside the house. Consider where the seller’s updating dollars will have the most impact. For example, it’s important to focus first on the spaces where updates will have the most impact.
Kitchens are the most important rooms in a home.
Then, outdoor space is important in terms of updating, especially here in Arizona. Make sure the pool deck is in good condition, either by painting or replacing. Sun exposure fades the decking, and makes it feel old and worn. Also, try to eliminate functional obsolescence. Sellers shouldn’t out-upgrade their neighborhood. Always consider the impacts of neighborhood on value of upgrades, and discourage upgrades more than the neighborhood requires or supports. Bottom line, sellers shouldn’t price themselves out of their neighborhoods.