With the current Wilmington real estate market being so hot, you may be wondering if you need to make as many updates to your home as you normally would when selling. It’s true that many homes are going under contract within days of hitting the market. Inventory is historically low and interest rates continue to make it a tempting time to buy. This has made it much easier for sellers to unload their homes. However, the market still functions on the same basic principals of price, condition, and location.
Forget Trends, Focus on Condition
When it’s a seller’s market, like it is now, homeowners don’t have to spend as much time on the cosmetic details of their homes. Trying to predict what buyers will like when everyone has their own opinion can be exhausting. Instead, leave the customizing to the new owners, who will most likely be changing things to fit their own tastes anyway. Just keep in mind, if you want to make as much money off the sale as possible, you should definitely consider making updates that will match the condition of the home to others in the community or be ready to list at lower price than the most recent solds.
For example, you could update to a new roof if the current one is at the end of its life. The same thing goes for a new water heater and HVAC unit. You should also be doing general repairs – fixing leaky faucets, replacing missing hardware, and patching holes (painting as-needed). If the home doesn’t look maintained, the buyer will mentally assign a lower offer price.
Consider Other Homes Sold Close to Your Location
While we say to just focus on the condition of the home, that doesn’t mean there aren’t exceptions. If your property is located in a neighborhood with homes selling left and right, and you haven’t done any updates since you purchased, you may want to consider doing something to put the property at a competitive advantage. Of course, only do this if you can afford the costs and won’t be displacing yourself, family, or tenants.
Probably one of the most appreciated updates is new flooring, because it’s hard to update flooring once you’ve moved in. If you have carpet everywhere in the main living spaces, consider updating it to wood or luxury vinyl plank (LVP). This is sure to make your property more appealing and give you a good return on investment in today’s market.
Price is More Important Than Trends
One of the major misconceptions about today’s hot market is that homeowners can tack on an extra $20,000 or $30,000 to the market value of their home, because buyers don’t have many options. This just isn’t true. These homeowners don’t realize that most buyers are still not willing to spend more than what other comparable homes are selling for. They’ve done their research and want to make good financial choices.
While home prices have risen significantly in the past year or two, purchase prices must still be justified. Buyers who need to purchase with financing are limited to what the bank is willing to lend, and if the home doesn’t appraise at or above the agreed purchase price, they will be forced to terminate the contract or pay the difference out of pocket. The fact they are getting financing in the first place implies they don’t have a lot of disposable cash, so how much can they really put toward buying?
Appraisers take into consideration other comparable homes that have sold. If you’re starting off priced above those, you are already tempting fate. That’s why it’s best to list a home at market value and let the buyers determine if they’re willing to pay more. If the neighborhood is truly in demand, there’s a good chance there is a buyer willing to pay above the listing price.
As long as your home’s listing price is aligned with other comparable properties that have sold, you don’t need to worry if it has the latest trendy paint colors and hardware finishes or even updated cabinets. It will sell.
Choosing Which Updates to Make
It can be hard to determine where exactly your property sits within the Wilmington real estate market. Is it on par with other comparable homes? Are there some things you can do to make it better aligned? Can you list it this month or do you still have some work to do? We can help you answer these questions and others. It may require a short tour of the home or just pulling the recent comparables. Give us a call to discuss what you’re thinking about doing, and we can help you come up with a listing plan.