The Seller’s Dilemma: How Much to Invest in Upgrades?
Upstater | July 1, 2013
photo by Grandpa and Grandma T/Flickr/Creative Commons license
A friend of Upstater’s had to sell her house at the height of the crash — a house she’d bought at the height of the bubble. A broker had suggested she invest in new windows, upgrade her bathroom, take out the stained Berber carpet in the basement. The upgrades totalled somewhere in the area of $50,000. The house sold for $70,000 less than she paid for it. Would it have been even less without those upgrades? We can’t know…but we can guess.
And that’s the dilemma when you have a property to sell, one that needs work. Do you want to sell it as a handyman special for rock bottom prices, knowing that your pool of potential buyers will shrink to those who have fixer-upper dreams? Do you do modest improvements, making it workable but not beautiful, with the assumption that the buyer will make some cosmetic improvements after acquiring the place?
Or do you go for it: put in that dream kitchen with the subway tile and the white oak floor and the reclaimed wood open shelves and the Ice Stone countertops (yes, we spend far too much time thinking about these things, especially since we’re renters). Will that fifty grand (we think a small kitchen could be wholly reinvented for that but correct us if we’re wrong) come back in the form of bidding wars?
