Small Defects Dramatically Affect the Final Sales Price

In a recent New York Times article, To Sell an Apartment, No Detail Is Too Small (http://www.nytimes.com/2011/02/22/nyregion/22appraisal.html?_r=2&emc=eta1 )  brokers in New York City share how seemingly small defects in a home can drastically affect the home’s final sales price.  They also point out how certain home improvements can actually increase the value of the list price.

Here are some examples of what the New York brokers estimated the discounts that buyers of New York City properties expect of poorly prepared listings:

·         Clutter - Subtract 5 to 15 percent

·         Dirty rugs - subtract $5,000

·         Chipped plaster or broken bathroom tiles - knock $500 to $5,000 off an offer

The brokers also estimated the value of certain home improvements on the listing price, such as

·         $10,000 paint job - easily adds $50,000 to the price

·         Replacing cabinets -  add $107,000

·         New lights (cost: $2,000 replacing lighting fixtures and $250 for a professional lighting designers expertise) - Add $32,500

Clearly, the listing prices, costs of improvements and expected buyer discounts will be dramatically less for different parts of the country.  Not every area experiences New York City prices for housing (thankfully so).

What will be the same in New York or our area is the buyer psychology about houses that “need work.” 

If any updating is required, then a buyer willing to consider that house will expect a deep discount in the selling price to make up for the “sweat” and hassle required to turn that house into their new home.  There is the reverse psychology in that buyers will grant greater value to improvements that make the house “move-in ready: like painting, cabinets, lighting, and new carpeting.

Any experienced Realtor can tell stories about how clutter, dirty carpeting and chipped plaster or tiles have hurt the final sales price.  They will also have great stories about how new paint, new carpeting and other upgrades helped command premium prices.  I know from firsthand experience as a few of my successful Realtor partners use me as a consultant to help their sellers pick out paint colors, carpeting and kitchen granite – in addition to using my home staging services.

It is easy to tell the stories but much tougher to convince the seller that they need to make these investments.  Maybe you can use this New York Times article to help make the case.  Or let me know if I can share some of my experiences with your clients.

Dwell in possibilities!

Cindy