Repairs and Upgrades

Summer is often the time when people undertake home improvement projects, DIY or otherwise.  Over the weekend, I had a friend ask me to visit the house her daughter bought last year, to see what I thought the value of the upgrades would be.  In addition, at my own house, we are in the middle of what I'm calling The Big Repair, where workmen seem to be there every day, and all the things that were new 22 years ago, or new with our "new" kitchen 15 years ago, are starting to fray, break, or wear out. 

When I talk to my friends, or my husband, I basically say that homeowners should do what they want, what they can afford, and what they need, without expecting too much in the way of a monetary return.  If something gives you joy every day (see Spark Joy for more on this concept), then why not go for it?  Very few projects raise the market value in the amount that they cost, and most are simply to keep the property current.  Some additions and changes are quirky enough, due to the taste or needs of the owner, that they add nothing, or possibly even subtract value. 

But does that mean that The Big Repair should stop?  No way!  You live in your home, and anything that you would have to do to sell it, you may as well do now, so as to reap the benefits from it.  Anything that you don't need to do, but that you want and will use (think pool, porch, garden pergola, fire pit as examples) and you can afford, are no different than what you might spend on a vacation.  And why not have as much fun at home as you could somewhere else??

First-time Buyers

There are lots of first-time buyers in the market now, and they are driving the action.  It's clear that it's harder to get a mortgage now than it was when those of us who are older bought our first homes, and the qualification standards are stiffer, even though rates are lower.

Because they are buying for the first time, they are often more hesitant to buy in situations where they might not feel comfortable.  Therefore, they often request more in the way of repairs, tests, and allowances for improvements.  In addition, having buyers ask for contributions to closing costs is a trend that we have seen in increasing numbers.  Sellers should not be insulted, since first-time buyers have no history, so no way of knowing that such a proposition might seem aggressive.

Since beginning buyers often look at more options, open houses have been very popular.  There may also be more repeat showings, with relatives and friends coming to weigh in on the potential purchase.  The closing can take longer as well, since documentation requests may be unfamiliar and take more time to fulfill.

Whatever the downsides, there is a great upside:  They are very motivated to buy and own their own homes, and they are out there!

Playing the Odds

We were doing some research this week, and were startled to discover that, from January 2010 through the present date, only one-third of all listings taken have sold.  That means that, for every seller who put his or her home on the market and sold it, two sellers put their homes on and nothing happened.  If you add those people who haven't bothered to list their properties due to the poor selling climate, there is a big supply out there. 

Since real estate agents work solely on commission, this is obviously a troubling state of affairs.  We only get paid one out of every three times we list a home, and listing always used to be the guaranteed way to make money, since the percentage of buyers who look and don't buy is higher than that of sellers who don't sell.  The combination is deadly.

 It does prove, however, that sellers should be listening to their agents about the price and improvements necessary to attract an offer in today's market.  What's the point of cleaning everything up and making plans to move, only to sit there for two years without a sale?  If you do want to sell, you need to do more than just sign a listing--you actually need to have a property in the top third of all properties, in order to sell it.  That's food for thought.