#616 in a series of true experiences in real estate
February 2011, Hills Newspapers
Quite a few of our sellers have spent $30,000 getting their houses ready for sale; some less, at least several, more. How much they spend depends of course on a number of factors including whether the seller has the money and the time available, what has been done to update and maintain the house in the past, and what the goals of the seller are.
Very generally speaking, the most interest and the highest prices are paid for houses that are located in popular areas, ones that are unoccupied but clean and attractive, and are in good working order.
Painting is undoubtedly the most often made improvement and the most dramatic. There is nothing that beats painting. What it costs can vary enormously depending on how much will be done and who is hired to do it. Good color choices can make it or break it but so can the quality of the work.
One of our sellers paid $10,500 to a painting company. We thought it was worth every penny. She had been in her house for 40 years but had not done any redecorating for most of that time. It took the crew 2 weeks to paint every surface inside of the house. Three bedrooms, 2 baths, including inside all of the closets and kitchen cupboards and the inside of the attached double garage. Plus some touch-up work was done on the exterior.
In that case the surfaces needed little beyond washing before they were painted. Most windows were unpainted metal and were left as they were.
At another house, exterior wood surfaces, siding, windows and trim had not been painted for many years. Paint was rippled and missing so considerable prep work was needed. Cost was $8,000.
Refinishing hardwood floors for a smallish house costs $3,000 to $4,000 depending on size of area worked, whether there are stairs included and if there are boards that need to be replaced. What a difference newly finished floors make. Clean, clear, shiny – well, not glossy. Matte finish looks polished but not glaring.
Most sellers these days hire a stager who may choose paint colors, may shop for light fixtures and window coverings. She or he will arrange furniture and other contents inside the house. Sometimes the stager will use some of the owner’s belongings but more often the seller has already moved and the stager brings in everything including plants and flowers.
Depending of course on the stager, the size of the house, length of time the house is on the market and what services and materials are provided, the stagers we use charge around $4,000.
But houses and circumstances vary. Not long ago we listed a house in Rockridge, one that the seller might have spent around $65,000 to fix up, but instead, spent far less. After a lot of thought and inspections, it seemed clear to us that although the house could sell for enough more to cover such expense, the seller was unlikely to net much more than if he did not pay for that work. Following is our thinking about this house.
Location: Highly favored neighborhood a few blocks from BART and upscale commercial.
Likely buyer: Single or couple commuter.
Quick sale? Very high likelihood.
House: One story, 2 bedroom, 1 bath house built about 100 years ago. Mostly original with some charming wood details, fireplace, detached garage, private garden. However, kitchen awkwardly divided and bath accessible only through either bedroom.
Inspections showed: Good roof, electrical main upgraded. Foundation concrete old and crumbly, should be replaced; plus, no earthquake retofit.
What we could see: Bathroom cramped with overly-large cabinets and bad paint. Hardwood floors throughout could use refinishing; walls need paint and wallpaper removed. Kitchen needs space rearrangement and modern appliances.
Owner: The heir to this estate lived in Texas. He was ready and willing to follow our suggestions for fix-up, large or small.
Our thinking: The location of this house is its most important aspect. Many people want to live exactly here. We did not think that spending up to $65,000 to do the foundation, paint, floors, appliances, etc. would net the seller enough money to make the work, and inherent risk, worthwhile.
Even spending that money would not solve the kitchen and bathroom layout problems. We suggested that a few minor repairs be made, plus cleaning and a little staging.
Our suggested budget, $7,000. Which we spent like this: $1,350 on inspections (general physical inspection, termite, chimney, foundation, sewer). $575 furnace repair. $1,920 bathroom – remove excess cabinetry, replace sink vanity, repair toilet, paint walls. $300 repair garage siding. $400 hauling. $600 cleaning and windows. $1,500 staging. $192 miscellaneous supplies.
Marketing: Flyer detailing bids for basic work recommended mailed to 200+ full-time local agents. Held open for agents with brunch served and for public. Very detailed disclosure package available to agents online. Website, newspaper open house ads, MLS, sign, lockbox (house unoccupied).
We cleaned up the garden and kept it watered. We kept fresh flowers and love in the house every day.
Results: Huge open houses, as many as 300 agents saw the house in the first week. Multiple offers over asking price. Heir accepted an all-cash offer from a single man who plans to live there and has been looking in this neighborhood.
