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Set the Stage for a Top-dollar Sale
Even in a sellers' market, it pays to make your house sparkle.
By Pat Mertz Esswein
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Nikki and Tom West were nervous when the time came to sell their 1890s Victorian home. Sure, the place was in great shape and listed on the historic registry of Alameda, Cal. And Alameda's location, on an island in San Francisco Bay near Oakland, made it a hot market as refugees from San Francisco's sky-high prices fanned out in search of more affordable homes. Why the anxiety? The problem, as always, was location, location, location. The house sits on one of the busiest streets in town. Neighboring homes are a bit disheveled, and there's a bus stop right in front. Getting potential buyers to stop, come in and emotionally connect with the house -- "to mentally move in," in the words of the couple's real estate agent, Gregg Fujita -- would be critical to a quick sale and maximum profit.
So the thirtysomething couple cleaned, streamlined, repainted, replaced carpet, improved a bathroom and spiffed up the yard. As part of a thorough decluttering, Nikki even stored daughter Cecily's highchair in her car during showings. The $1,500 in cash and the sweat equity paid off in a big way, convincing Fujita to list the house for $599,000 -- 5% more than he would have otherwise. After multiple offers within two weeks, it sold for $610,000.
The Wests' story illustrates the value of preparing a home for sale. Do it right and your property will appeal to more prospective buyers, driving the price higher and cutting the time it takes to sell. "In a slow market, we can get the house sold," says Barb Schwarz, founder of the International Association of Home Staging Professionals. "And in a hot market, we can get you even more." Schwarz urges sellers to reject the notion that going the extra mile isn't necessary in the sellers' markets that are so prevalent these days. "Have you ever seen a house sell for too much?" she asks. "If it was nasty and you had three offers, what if you had staged it, had ten offers and sold it for $100,000 more?"
For advice on preparing a home for sale, we consulted experts around the country, including Holly Ziegler, an expert in feng shui (pronounced fung schway) -- the ancient Chinese design philosophy that promotes harmony and balance in an environment.
Be prepared to spend
Although your own elbow grease can take you far, you may need to lay out some money, as the Wests did, to fine-tune your property. You'll get back what you spend and more. The Wests' agent, Fujita, says that in his market, buyers can expect a return of about five times what they spend, though he notes that the impact is greatest with low-end properties that are likely to be bought by first-time buyers.
Conversely, doing nothing can cost you mightily in both sale price and time. Jenny Milligan, a real estate agent in Portland, Ore., recalls visiting a home with great street appeal in a nice area of the city. But as soon as she stepped inside, Milligan confronted the stark reality: The interior hadn't been updated since the house was built 30 years before. "I remember thinking, Gosh, these people are going to suffer at least a 10% to 15% drop in price with the house in its current condition -- maybe even 20%."
Owners in such a situation may be tempted to take the easy way out by offering a decorating allowance or lowering the price to compensate for the work that needs to be done. That strategy may work (particularly with buyers who prefer colors other than "Realtor beige"), but it can backfire, too. Agents agree that buyers expect extra compensation for their inconvenience. They may demand a $20,000 price cut, for example, to cover a $10,000 job that falls into their laps. This can be particularly true with young, first-time buyers. "Gen-Xers are not into sweat equity," says Deb Greene, a real estate agent in suburban Minneapolis. "They want to walk into a perfect, mint house."
Can you improve too much? Yes, especially if you're doing it for the next owners and not for yourself. This isn't the time to add a Viking cooktop or luxurious hot tub.
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