Should the Seller Make Changes Before Listing a Home?

When listing a home for sale, the question often comes up whether or not certain things should be done before it actually is put on the market. The answer pretty much is found in the Law of Increasing and Decreasing Returns...if it doesn't yield back the cost of doing it, don't do it. But what is often overlooked is the word "cost" and I would submit that the definition of that word is not the same to a seller as it is to a buyer. Let me explain with an example. I have a listing that could use some siding repair. For the sake of this example, we aren't even going to get into possible appraisal issues....that is for another blog at another time. Seller doesn't see the siding as a big deal and has a bid from a contractor for $500 to do the repairs. Seller's way of thinking is that he will take $500 less for the house and that should solve it. The seller's impression of cost is how much money is required to fix the siding. When a buyer sees the siding needing replacement, they start thinking about how much will it cost to do the repair, but, what if there is more damage back behind the siding that isn't known right now (nothing worse than the fear of the unknown!) and how much trouble is it going to be to get someone out to do the work and what if they aren't satisfied and what if, what if, what if. The buyer starts thinking worst case scenario. Included in that scenario is a something I like to call the "aggravation factor". Even if everything is the best it can possibly be, there is an aggravation factor attached to "cost" because I have to use my time to get it done and by gosh, my time is VALUABLE! Buyer thinks this siding repair is worth about $2,000 in reduction just because they will have to deal with it. Buyer thinks that is reasonable, because don't forget, the wall could be falling down back behind that siding! Seller thinks the buyer is gouging them. Who's right? In each person's own mind, they are.

It doesn't really matter what the issue is, the seller is going to think best case scenario when either pricing the property or working with an offer and buyer in most cases, is going to think worst case. Each item that is going to come into question is going to be an opportunity for disagreement.

We often think of value as being different from one person to the next. What one person thinks a property is worth, the next person won't. We usually think of cost just in dollars and cents but, when it comes to real estate, even cost can be different from one person to the next. If possible, the seller just do as many things as they can before listing the home. Even if it doesn't add value, it may save or recover equity that would be lost by what a willing buyer would be willing to offer on the home.