Nathan Walker, Sales Director, talks us through a few instances where undertaking property renovation projects before selling may make sense, and where it may not...
Homeowners are often faced with the conundrum of deciding whether or not it’s worth doing certain renovation projects and upgrades to a property before selling it. There’s the initial planning and financial outlay to get the work done, but this could lead to listing and selling the property quicker and at a higher price, allowing sellers to maximise their profit.
However, a seller needs to take a few things into consideration to ensure the renovation is worth it. In some cases, it could be a risk as you may not recoup the investment. In other cases, the work may be essential for buyers to obtain a mortgage on the property.
Hopefully, some of the below advice can help you with your decision.
There’s no one size fits all approach when it comes to making upgrades to a property before selling it. In an unpredictable market, it may become even more difficult to make that call. With that said, taking a few things into consideration, such as comparing your property with the condition and value of recently sold properties in your area that are of similar size and offering, can often lead to a clear answer.
If we use property market conditions between 2020-2021 as an example, we can understand why there may have been some difficulty for homeowners when deciding whether to renovate before a sale. Most renovation projects, when done right and carried out on a suitable property, should turn out to be worth the investment when it comes to selling, but during these particular years the demand for building works was also high, driven by homeowners spending more time at home with money they weren’t spending elsewhere due to the pandemic.
So, while house prices were rising steadily between this period, the high demand for building work and the required materials saw the cost of carrying out those renovation projects also come at a premium.
A property may be in a decent condition overall, but perhaps the kitchen could do with a modern overhaul. This type of refurbishment might cost perhaps somewhere in the region of £5-10,000 on average for the buyer to carry out, but they’d also take into consideration the hassle, time, and effort of getting the work done. Even if they are the type of buyer who would enjoy renovating parts of the property, that’s unlikely to stop them from using it as leverage and trying to have at least £15-20,000 taken off the asking price.
If you’ve been living in the property for many years, even decades, the property may be one that could do with a full renovation to bring it up to date. This would require a sizable investment, a lot of time, and ideally some renovation or home upgrade experience, so unless you have the required funds available it may not make sense for you to personally carry out this work - instead choosing to sell the property at a lower price than what it would’ve been worth had the renovations been carried out, but to a buyer who’s prepared to undertake that sort of extensive work.
On the other hand, the work required could be structural, which may be essential to carry out for any buyer to gain a mortgage.
So, as you can see, it’s not just about the property in question, but the decision is also unique to each homeowner’s circumstances and future plans.
Before mentioning any serious renovation work that a soon-to-be-seller can consider, it’s worth mentioning that most properties have a plethora of smaller renovation or maintenance-type jobs that can and probably should be done. These are usually low-cost and quick to do but can make a big difference as the impact of presenting your property to a buyer in its best condition can be huge.
There are certain issues that could become a real hindrance to your hopes of a sale - so much so, they could even render it impossible for any potential buyer to obtain lending from a mortgage provider. Some issues may be included in the properties building’s insurance cover, so it’s always worth looking through the paperwork and giving them a call to find out.
Of course, if a property cannot be mortgaged, or if a mortgage is incredibly difficult to obtain, then a seller may be limited to cash buyers. This is likely to reduce the amount the property will sell for by quite a margin.
Here at CPS Homes, we have the experience and expertise to help you sell your property. With branches across Cardiff, our knowledge of the city is second to none. To learn how our friendly sales team can help, get in touch by calling 02920 668585, e-mail email@example.com or pop in branch and speak to us.