Still staying in school? Welcome to part two of “Old School,” the idiomatic definition being a style, way of thinking, or method of accomplishing a task that was employed in a former era, remembered for its inferiority to the current method, and thus replaced by a superior method. In other words, a way of doing something that just doesn’t work anymore.
Last week, we covered three specific bullet points. This is the rest of the story, the proverbial numbers on the chalkboard that should simply be erased because they don’t add up.
“We didn’t get an offer the first day like my brother-in-law’s nephew did. We need more marketing.”
No, you don’t. While proper marketing cannot be underestimated, all homes are not created equal. Your brother-in-law’s nephew lives 45 miles away in a large city. Every market strategy should be very specific to the home, location and property. The statement I hear most often from sellers right now is this: “We want the buyers from California with cash to come pay above asking for our home.” While this has happened, on rare occasion, it is not the standard. Frankly, it is more of an urban legend of sorts ... something that never happened to anyone in your family but someone in your friend’s mother’s family twice removed.
Placing an ad in the LA Times for an overpriced fixer upper in Mendon, Utah, will not only cost about $610 for three lines in the classified section, but it will also not bring any viable buyers. Most people search for homes online first, not in the LA classifieds.
Also, if a home is overpriced, poorly photographed, or smells bad and is cluttered and dirty, nothing short of a miracle will sell the home. Remember the apropos cliché in this instance: God only helps those who help themselves. If you are seeking said miracle, reduce price and clean up the home.
“I know the carpet is bad, but I don’t want to replace it. Let’s just throw in a flooring allowance at closing and the buyers can pick their own carpet.”
How about we don’t. For one thing, most lenders will no longer allow an amount to be held in escrow for repairs or upgrades. It looks fishy to an underwriter and they won’t sign off on the file. No sign off equals no closing. It also equals less money. Bite the bullet, get the flooring done. It will make a huge impact on sellability (a word that can only be found in the Jen Fischer dictionary of original words) at a minimal cost. New paint and flooring are NOT old school. Both are still the least expensive and net the highest payoff of almost any other thing you could do to a home before selling.
If one simply cannot do that, for one reason or another, the seller can either reduce price or contribute to closing costs to offset the cost of new flooring for the buyer. However, at that point, it is a little bit of quantum math. It’s likely you will net far less than if you just had it done in the first place.
“I just spent $10,000 on new shutters so we can price it at least $5,000 higher than the price you pulled with comparisons.”
First off, who is to say that none of the comparisons didn’t have new shutters as well? The truth is new shutters do not really add value to a home. They are beautiful, they give the home nice curb appeal, they do a great job covering the windows, but they do not add value. While some upgrades do, it is never dollar-for-dollar; it is rarely even 50% of what was paid, and it most often doesn’t add dollar value at all. It does, however, contribute to sellability. Also, see fences, new roofs, HVAC systems, central vacuums, fruit trees or built-in bunk beds. Fun to have, sometimes necessary, but not lucrative.
While the rules at the new school may seem intimidating, we will all soon adapt without having to see the principal. Having spent my fair share of time in the principal’s office, I would advise adapting quickly.