Do you have a house to sell and don't know if you should do any renovations first or just sell it as is? It's quite a common dilemma for sellers. One one hand you know that it would be worth more after renovation, on the other hand, there are lots of questions to be asked- what repairs to do? What repairs will get the money invested back. What repairs would result in getting back more than it cost to do those repairs? And of course the ever popular - is it even worth it to do any renovations and dealing with all the associated problems and headaches that will arise during a renovation, when the price difference may not even cover the cost of renovations?
It is important to understand how the sales price for any house works. A house has a maximum price - the price ti would be worth if it was brand new. That price is the ceiling so to say, and without remodeling it's very unlikely to sell for more. On the other hand if the house is not brand new than it will sell for less than this theoretical ceiling price. In essence, instead of thinking "How much more will a house sell for if it's renovated" you should think "How much less will it sell for because it's not renovated." This type of thinking more closely resembles the thinking of a buyer, and allows you to put yourself into buyer's shoes and see from their perspective.
Now that you know how buyers think it should be easy to realize that the buyers will pay less for a house that has "problems" or at least anything that buyers perceive as problems. As such it's not as much about if the house is newly renovated or old, but rather do buyers see it as a negative or not? For example, a five years old kitchen that is kept in a nice, clean condition is unlikely to be seen as a problem even though it's not bran new, yet a newly painted siding might be seen as a huge negative if it's been painted bright orange - not everyone wants to buy an orange of a house.
By:John Ros
