Property Condition vs. Market Value: The Sellers Guide

If there is one thing that is sure in the real estate business, the condition of a property affects its worth to a buyer. With a home that is even slightly in disrepair the market value may drop significantly.

I’m not necessarily talking about things that obviously affect the value of your home, such as its structure or insurability. Those are factors that can’t be seen, and although they do affect the value greatly, they don’t always affect the way a buyer views the property (note: if you do know about structural problems you should have them fixed to avoid lawsuits).

What I am suggesting is that the way your home looks, when it goes on the market, greatly affects the perceived value to the buyer. It is often the details, or the little things, that greatly affect the price you can ask for your home.

If you need an idea of what perceived value means, picture it from a buyer’s perspective:

Let’s say you have listed your home for $299,000. That price comes from comparing it to similar homes in the area.

When the buyer is walking through your home though, they see leaking faucets, a roof that needs shingles, faded paint on the walls, and a mess in the living room. From the buyers perspective you may have just taken $50,000 out of the price.

The home they just looked at up the street was the same price, and it looked to be in much better condition. The landscaping was nicer, the house itself seemed to be in good repair, and it didn’t need all that work.

If your budget was $299,000 which one would you choose?

Fortunately, it isn’t difficult to get your home ready for sale. Unless your home is in need of major repairs, it doesn’t necessarily have to cost a lot either. Sometimes the market value is in the details. Here are five steps to take to increase the market value of your home.

1. Fresh Paint: Although a fresh coat of paint may only cost a few hundred dollars if you do it yourself, it adds many times that to the value of your home. Paint may seem like a simple issue, but faded paint tends to make a home look dirty and dingy.

2. Make Sure Everything Works: A burnt out light bulb, may be just that to you. To a prospective buyer, though, it is an electrical system that doesn’t work. That burnt out light bulb just took $5,000 out of the offer they were going to make. Make sure your electrical, heating, and plumbing systems are all in working order when trying to sell your home.

3. Cleanliness Matters: Just like a bulb was perceived as poor wiring, a dirty carpet may be viewed as needing a replacement. Take the time to clean your home while it is on the market.

4. Cut the Clutter: If you have three couches in your living room, to you it may be functional. To a buyer you have just made the room look three sizes smaller. The same holds true for other rooms, and your countertops. Cut the clutter by getting rid of unnecessary items in your house.

5. Make it Available: One mistake that can affect the way a buyer perceives your home, in a big way, is not making it available to show. Many people run on tight schedules. If you can’t make your home available to show on their time – you may have just taken all $299,000 out of the price (lost the sale). If you’re serious about selling your home, make the times agents can show it to prospective buyers flexible. This is best accomplished by installing a electronic MLS lockbox. When someone opens the box to obtain the key, your Realtor will be able to see all information about who opened the box and at what time via the Internet. The days of the unsecured combo locks are gone!

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