The decision to sell a house in Sacramento, Stockton or Modesto (or anywhere for that matter) is complicated by a number of factors most of which are related to the condition of your house and the amount of deferred maintenance that has accumulated over the years. For some homeowners and their houses it means a few weekends knocking off little projects to get everything in tip top shape. For others, it’s a number of major projects that become more and more interconnected, time consuming and costly. At at some point they all become convoluted and you need more than a checklist, you need to create a plan.
Most real estate experts say that you should start the process of preparing your house at least 6 months before you decide to sell. For most people the task is daunting because of the amount of work it requires and the emotional tug of war surrounding the decision, the time frames, the condition of the house and all the things you know need to get done. Add on to that the emotional and sentimental attachments we have towards our homes, (memories of parents, children, friends and family gatherings) and its no wonder that selling a house is one of the most stressful events in persons life.
Not to mention one more very important thing… Selling it fast and getting it done right.
That is the big one… no one wants to make a mistake. Every homeowner wants to maximize the sale of their house and get as much equity out as possible. It’s understandable as that sale sets up the next house, and your equity is also critical in determining your down payment and subsequently your monthly mortgage expenses.
So when you get to that point and you want to know How to Figure Out What to Fix Before You Sell Your Home, I am hoping that this article will help you.
Actually, what I am really hoping for is a way to communicate that no matter what you decide, you need to remain in control of your own homes equity. It belongs to you, you worked hard for it and you should not willingly give it up to anyone in the form of a commission, contractors fee or sales price without understanding the trade offs in every scenario. That means that you need to learn the questions and find the solutions that make sense for you. Before we get too crazy with all kinds state of the market explanations, whether its a buyers or sellers market, etc., you need to answer a few questions about what you want to accomplish.
What is your goal with the house? Are you chasing the top of market value and willing to spend thousands of dollars on fixing and updating your house so that you can get as much money as possible with the the sale or are you wanting to put the most amount of money in your pocket regardless of the sales price? Let me ask that a different way. Are you willing to spend whatever it takes to get the highest sales price at the expense of how much you actually put in your pocket when the house finally sells?
I have seen people spend into the oblivion chasing the highest sales price and almost break even. They needed to have the highest priced house when all they needed to do was fix and update and they would have pocketed an additional $20,000.00 had they just been concerned about equity.
On the other side of the spectrum, anyone can put on a tool belt and start making improvements to a house. I have seen houses that every room had at least one project that was started, and never finished. I have seen houses where every project was a mask for the underlying problems and should have never been started. By the same token, anyone can hire a contractor and spend a lot of money to fix and update a house, but without a plan, a budget and a very rigid time frame, the money you spend could be a dollar for dollar wash or worse yet, a huge loss.
It’s Not Magic it Takes Work
We all wish that we just had a Magic 8 Ball that could answer any one of life’s big questions. I mean, you could just pull it out with out any risk and shake it, roll it and voila the answer would just appear . You wouldn’t need to know how to figure out what to fix before you sell your home, because the answer would be plain as day. Unfortunately, none of us get issued a Magic 8 Ball at age 18 that eases some of the decision making process. Instead, we get to make those decisions ourselves. We do our research, calculate the risk and cost, we assess the market, and we put a plan in place and hope for the best. Right?
So if you need to know the answers and take it to the next level to create a plan, validate the details and then error on the side of caution, then dig in get comfortable and roll your sleeves up, because this article is for you. I am going to show you a process that will allow you to become a leading participant in the sale of your house by becoming proactive in finding the questions and answers. Through the process, at each step you’ll interview real estate agents, cash home buyers and/or contractors. You’ll pick up a few more trusted advisers, feel confident at the end to commit to your plan of action. Some of it will look like and feel like work, but with each conversation, the picture will become clear and your plan will have a purpose and a clarity that will allow you to move forward in charge and confident of the outcome when you sell your house.
How to Figure Out What to Fix Before You Sell Your Home.
1) Start with the Expert on Your House
Regardless of what you may think, if you have lived in your house for any amount of time, then you are the number one authority on what is right and wrong with your house. Every time you pull into the driveway and walk up to the front door you notice everything. Maybe not consciously, but you know. From the moment that your key hits the tumblers, you’re home. Love it or hate it, it’s yours and you own it and every single problem.
Make a List of the Things that You Know Need to be fixed
It’s time to make some lists. First, because I am positive, and your outlook should remain upbeat during this process, make a list of all the things that you love about your house. Then make a list of all the things that you really dont like about your house. Finally make a list of all the things that need to be repaired or fixed at your house. I am not talking about the things that are on the list that you dont like. I am talking about the dry-rot under the front window sill and the eaves by the back patio. I am talking about the water faucet that leaks in the back yard and the toilet that is lose in the middle bathroom. That is the list that matters.
When you are done with all three lists. Set your “love list” aside and start attaching a dollar amount and a time frame to each of the items on you other two lists. When you are done, you may need to pour yourself a stiff drink depending on the size and scope of your list.
2) Hire a Home Inspector
At some point through this process your home is gong to get inspected at least once. It is a fact, that unless you are selling your house to a real estate investor or a cash home buyer, your home will be bought by someone that requires financing and it will require an appraisal and an inspection. If that is a 98% certainty than I would advise you to get it out of the way and pay for that report now. You would be surprised at what you may learn.
I know, it is scary to have someone come into your house and nit pick every little detail. After all it is your house and the thought of someone poking and prodding coming up with a mammoth list of what is wrong is daunting. It is, but if you really want to know what is wrong with your house, then I recommend spending the $350.00 to $400.00 for a report that will tell you almost everything.
- Review the List with the Inspector item for item and ask a lot of questions. Some home inspectors will also provide you a quote to fix the items that were found. Be careful there is a certain conflict of interest that exists when you ask someone to find the flaws and then fix them. Not all home inspectors are created equal and the convenience may have a high price associated with the fixes. You have to be the judge.
Compare Your List
Selling a house in any condition is a job, but until you get a handle on the scope of that effort and know what is wrong, you are operating in the dark. The objective is to become so well versed in your own house based in facts, not emotions, that it is manageable. It is the only way that you are going to be able to create a budget and a plan to feel comfortable with make the next decisions. Now, you need to compare all of the lists. The list that you made, with the the Home inspectors report.
- Compare the Two List Pare it Down to what you would like to fix
- Determine What you can afford to Fix
- Do it Yourself
- Hire a Contractor
3) Hire a Contractor
With your consolidated lists in hand you need to determine what you are capable of doing yourself and what you would like someone else to do. Either way its time to start making some phone calls and figuring out your cost. You should gladly take referrals and know that not all general contractors are created equal. Some are new home builders and have remodeled a house or two. Others are experts at the remodel and understand the workarounds to the challenges that they provide. I know, I am a general contractor and I specialize in the remodel. They are complicated and costly and before you you start you need to know what things cost.
It is why contractors give estimates and their contracts are based on what they know and can see. The unknown happens when you open up a wall or crawl under a house and the real story is known. Remodels are complicated and they are notorious for cost overruns.
Never the less talk to at least three contractors and get prices for fixing what is on your list. You should know what everything will cost and start to build your budget based on the estimates that you get back.
4) Know What Your House is Worth
Next, you need to know what your Sacramento house is worth today, right now in its current as is condition. It is important that you find out what you would get if you were to sell your house now. It along with the balance of your mortgage (if you have one). It establishes your baseline cost. It establishes the lowest price that you could get your house for if you sold it as is right now.
There are four resources for you to do that and I am going to outline them here.
- Call two or three real estate agents and ask them to prepare a comparative market analysis of your house in its current as is condition**
- Call two or three real estate investors or cash home buyers and ask them to give you a Fair Market Cash Value Analysis of your house.
- Call a title Company and ask for a comparative Market Analysis for your house. They are Free
- Call an appraiser and pay $350.00 to $400.00 for an appraisal of your houses value in its current as is condition.
** In the next section I am going to tell you how to meet real estate agents and how to pick their brains while at the same time go through open houses in your neighborhood.
5) Know Your Competition
Knowing your competition means knowing your market. I know that you are rolling your eyes and probably saying isn’t that what a real estate agent is for? Under normal circumstances I would agree, but, maybe were not dealing with normal circumstances. Let me explain. After the bubble burst in 2008 there was a mass exodus for real estate agents. They left in droves. Certainly their ranks have been somewhat replenished but when you consider that over 87% of all real estate agents fail within the first 5 years , you begin to see that yo may actually know more than they do. That is a staggering number. I’ll give you another one… over 35% of all real estate listing expire without ever being sold. That means that real estate agents don’t sell houses. It may be hard to grasp, but if you want to sell your house and get top of market than your house has to be in shape to be called top of market and before i let a real estate agent talk me into spending thousands of dollars on fixing and upgrading a house I want to know what the return will be.
Why such the hard stance? There is just too much supporting evidence that most real estate agents are not all that well trained to be acting in your best interest. According to Tom Ferry at Inman, “Long ago, National Association of Realtors released a report stating that the vast majority of new agents come into real estate with no sales experience, no marketing experience and no negotiation experience. What are the essential skills needed to succeed in real estate? Sales. Marketing. Negotiations. Hmmm. If you haven’t mastered these three skills, you need to be working on them constantly. Put yourself in situations where you learn the objections, get hung up on and gain that experience”.
So now that we have dissected that, let’s look at what you can do to use real estate agents as a positive resource for evaluating your house. It is important that we ask people to succeed at what they can excel at and then its up to us to fill in the weaknesses with other resources that make sense.
We all know that real estate is competitive and the best way to get the most money for your house is to know what the competition is doing. You have to put in some time here because if you dont you will be at everyone else mercy. You will be that person that hands the keys of the house over to a stranger and hope that they do the job that you are going to pay thousands of dollars of your hard earned equity for.
Where do you start? Right in your own neighborhood.
So you really have to ask a lot of questions and compare and contrast all of the answers. You have to do the research and that means knowing what people want in the specific price range of the house that you need to sell.
The good news is that there is so much information available and you can access it very easily. All that you need to do is “Google” open houses in your city for that weekend and you’ll have your competitions addresses. Take an afternoon tour and proudly walk into the open houses and tell the real estate agents what you are doing. Ask them what fixes and upgrades the sellers of those homes have made and why. Ask about the money that was spent. Take notes and ask more questions. Not only will you see what your neighbors have done but you also get to know the competition and you meet several real estate agents. It’s your chance to get a real feel for their work ethic and personalities. You get to ask them questions like
- What did the sellers do to prepare for the sale
- Did they hire a contractor
- Did they do the work themselves
- Ask them if they made any recommendations
- Did it cost a lot
- If they didn’t make the changes and fixes what would the house other wise sell for.
- Ask them why the house hasn’t already sold.
- Ask them how they arrived at the price point its on the market for
- Ask them how long before they will recommend a price reduction if they dont get any offers
- Ask them to give you a CMA (Comparative Market Analysis) for your house
- Ask them for a list of other properties that are for sale in the neighborhood that are close to your houses condition
- Ask them for a recommendation on a price point for your house as it is in its current condition and
- Ask them to give you a recommendation as to what to fix in your house
- Ask them for a recommendation on a price point for your house if you followed their repair and upgrade recommendations
- Ask them about the commissions that they charge and who pays for it
Be careful though, open houses are the best place to meet NEW real estate agents, because believe it or not, open houses are a waste of time when it comes to actually selling a house. Real Estate Agents know this and the real purpose of the open house is for the real estate agent to generate new buyer and seller leads. Don’t worry, just know that when you walk in it is appreciated because you are the lead, you are the target. Walk in and have fun, ask them to pour you a glass of wine and learn as much as you can.
6) Do The Math
You are ready! You now have all of the information that you need to know How to Figure Out What to Fix Before You Sell Your Home. It is really simple. Take your list and add up everything that YOU think needs to be done to get the price that you want for the house. Then from that sales price subtract your existing mortgage balance, 5% sales Commission (the seller pays both sides), the cost of the repairs and updates, an additional 5% in closing cost, your inspection fees, appraisal fees, three more months of mortgage and holding cost. Now compare what is left over (your equity that will be in your pocket if and when you sell) to the cash offers that you received from the the cash home buyers in Sacramento.
Don’t you wish that you could just pick up the phone and get an all cash offer without having to do any of that????
My name is Peter Westbrook and I am a pioneer cash home buyer in Sacramento, Stockton and Modesto. We Buy Houses in Sacramento and we pay cash. It really is that simple. Over the past 10 years I have helped hundreds of families with problem properties and sticky real estate issues. I am an expert ad I get involved at every level to make sure that what i promise happens.
I know that in real estate everyone’s an expert. Just ask them. Lucky for you there is no shortage of information available. A smartphone, a tablet and you have access to many, many resources that didn’t exist just ten years ago. So if you need to sell your house in Sacramento, Stockton or Modesto just ask anyone that has ever done it… its not always easy, and it is work, but with a process and a vision you can weigh your options and come up with YOUR plan to make it happen.
I am hopeful that my article was helpful and I was able to break your options down and offer some guidance and several alternatives that may help you save time, money and frustration. If you have questions about your house’s condition, would like a fair market value offer for your house (minus the repairs), some advise on what to fix or better yet, what not to fix, or you just want an estimate on what it will cost to fix your house, then give me a call at (209)481-7780.