In connection with our story on strategies for home-sellers, real estate broker Morgan Knull took reader questions on ways sellers can better position themselves to get a fair offer on their homes. An edited transcript follows.
Total upgrade necessary?
I have a condo in an area that is popular and continues to grow (U Street) so based on location alone, I don’t think I’ll have trouble selling. The bathrooms have been updated, but the kitchen is still about 15 years old — functional, just not brand new. How critical is it to have all the latest bells and whistles in a place where you know the location is going to be a big seller?
Two thoughts. First, it depends on the comps. In some buildings and neighborhoods right now, it’s possible to do less and still sell, assuming there’s demand and you price appropriate to the condition.
Second, when it comes to remodeling kitchens (and bathrooms), you don’t gain much advantage by doing partial renovation. Buyers are not impressed by an old kitchen with new granite counters. So avoid piecemeal remodeling because it doesn’t add value, but it still costs you money that you probably won’t recoup.
Is the best strategy to wait?
I own a condo in downtown Silver Spring that I would love to sell but don’t think I could get enough for to pay off my mortgage, despite the efforts to revitalize downtown Silver Spring. While the market seems to be improving in some areas of the region, this does not seem to be true for 1) condos and 2) the Silver Spring area. Is the best strategy in this case to wait it out a while longer or are the low mortgage rates the best impetus to try selling now? Thanks!
A familiar story, I’m afraid. The condo resale market remains the weakest component of the local housing market right now. Owners who bought in 2006-ish are still upside down in most places, even in otherwise “hot” neighborhoods.
While low interest rates are stimulating buyer demand, they don’t alter the fundamentals of the market, in terms of what condos in your neighborhood are selling for. Unless you can sell for enough to recoup your purchase price and transaction costs (broker commissions and transfer taxes), it’s best to stay put, rent, or consider a short sale if you qualify.
How much effort to expend sprucing up a condo:
I’m getting ready to sell a condo in the Reston area that I’ve owned for several years. The unit is 20 years old, but is in a well-maintained development and is in good condition. Can you give a short list of things someone in my position typically needs to do to spruce it up sufficiently before going to market? I am willing to spend some money, time and sweat but don’t want to do more than the typical new buyer is expecting. I also want to fix things that make potential buyers think “ick.”
Condos in Reston seem to continue to be in a slump, which is perplexing considering the visible evidence that Metro is finally coming, at least as far as Wiehle Avenue.
More than anything else, the best recoup on pre-listing improvements comes from fresh paint and new flooring if carpeted (or refinishing hardwood, if needed). Beyond that, declutter, declutter, declutter! If the bathrooms are dated, sometimes you can make some inexpensive improvements to give it more of the “spa” look — new vanity, new flooring (tile is not expensive in small areas, or tasteful vinyl that looks like tile), new fixtures (avoid chrome and embrace the brushed-metal look).
Hi, I live in the Columbia area of Howard County. Can you give me any insight as to how prices are faring in my area? I would like to sell my townhouse in two to three years, and am in major renovation mode, but fear that I may be spending too much. On the other hand, I’ve noticed houses with no upgrades tend to sit on the market for a long time, so I don’t want to do too little either. We have upgraded the kitchen and all three baths, flooring and paint throughout. Next year we’ll work on “curb appeal.” We live in a very nice, established neighborhood, and good schools nearby, but there are still several short sales in our neighborhood that are dragging prices down. Will these short sales/foreclosures be a problem in the future do you think, and what other upgrades can you recommend? Thanks!
HoCo is still a recovering housing market. Hopefully, BRAC will be good to Columbia in particular. There is minimal demand right now for houses that aren’t upgraded but which are priced as if they are (or priced nearly as if they are). My advice, since your time horizon for selling is a few years off, is to make incremental improvements that add value for you (i.e. enjoy your improvements now) and which will translate into value when it’s time for resale. That means kitchens and baths, flooring, fresh paint, new light fixtures and bathroom fixtures, curb appeal. But be sensible about how much you spend. You usually recoup spending $10-$20K on a kitchen remodel, but you won’t fully recoup spending $50K.
How much updating do we need to do?
My husband and I will be putting our house on the market later this year. We have two small kids and one cat, and try to keep the place pretty clean, but when it’s on the market, does it have to be “showplace” clean at all times? Also, can I expect that people will look in our bathroom cabinets and closet drawers and so forth, so I should clean these out? Also, our kids’ room are both painted in kid-friendly themes. Do we have to paint over both rooms with neutral tones before putting it on the market? One kid will be brokenhearted. We’d be happy to paint over it after it’s sold.
Selling homes occupied by kids and/or pets is never easy. It exhausts sellers because buyers will want to come and look at the least convenient time. Or so it always seems. But if you do it right, you’ll compress the marketing time so you’re not doing it for months and months. The more you “front load” the process, the less you’ll be playing defense once you list publicly for sale. For kids rooms, I recommend decluttering as much as possible (you don’t need 50 stuffed animals or books or toys) and removing some of the extraneous decor that may be present. But it’s okay for it to still look like a child’s room, since it is.
Finding an agent for selling
I survived the process of buying a home for the first time, but now I’m thinking of selling and feel like a fish out of water again. I’ve read that you should interview three or so real estate agents to find one to help you sell, but I’m unsure of what questions I should ask. And is this a common enough practice that an agent wouldn’t just think that I’m wasting his or her time?
I find that most sellers don’t interview multiple agents before signing up with one, although they usually tell us that because they want to make sure it’s a good fit first. There is an argument for hiring a neighborhood expert who sells in your community; there’s also an argument for hiring a top producer who doesn’t have any other listings in your neighborhood because they’ll be motivated to sell your house first. When a listing agent already has five other listings in the same neighborhood, selling yours first isn’t always a priority.
Our agent suggested having a “broker’s open” to show other agents the house, get their feedback on pricing and any necessary repairs, etc. I have never heard of this before. What are your thoughts?
I haven’t attended a broker’s open in 10 years. I look at the online photos, and I think my buyers do, too. There are two instances in which a broker’s open might be helpful. One, if the house is difficult to price, it could be beneficial to ask a large group of agents to offer their opinion of the price/pricing. Two, if it’s a unique property or if access is difficult for some reason. Brokers enjoy checking out unique properties, but doing a broker’s open at a cookie-cutter condo or tract house isn’t likely to attract much turnout.
Are there ways to non-actively put a condo on the market? We want to get a larger space but we are not under a time crunch right now. Also, we’re in the Alexandria area where it seems many new condos are being built so how can we stand out as an older unit.
I think Zillow has a “make me an offer” FSBO [for sale by owner] feature, but not sure that really is compelling unless you’re priced competitively (or slightly under) market. Otherwise, when selling a house, you should hold nothing back with the marketing. The more buyers who know about it, the better. In terms of older in a neighborhood with newer competition, it’s hard to compete except by selling the value of your place (in terms of price, or the greenery of the landscape if it has a yard). You also will want it to be updated enough that it resembles “new wine in an old bottle.”