No, I don’t want your bad bathroom renovation… a real talk about the importance of pricing right.

When you are planning to sell your house, and considering potential upgrades, it’s important to look at your property as a whole to be able to strategize what might be the most appealing to potential buyers.

It’s also important to be realistic about price, and the value of your home.

I recently looked at a condo that was a really cool loft, great space overall. The kitchen was around 20 years old and the space needed to be renovated. I did some digging and saw that originally the space was a two bedroom, one and a half bath.

Here is the original kitchen and baths. Just look at those formica clad gems! When I see a space like this I honestly get so excited, just think of the possibilities! For certain buyers, this is exactly what they are wanting… essentially a clean slate where they can be the ones to create a fresh new space.

existing kitchen

The bathrooms were joined by a door so that both could access the toilet, pretty clever if you ask me…

old bathroom.jpg

After the property had been on the market for almost three months with no movement, the seller took it off market, and ‘renovated’ the bathrooms. While I think their creating two full baths does add value, personally I think they wasted their money in upgrading the bathrooms otherwise, and should have just left them alone.

Why?

This specific property has been overpriced since it first hit the market {if it wasn’t, it would have sold!}, and the bathroom renovation is underwhelming at best. Here’s the thing, and I’ve mentioned it before. If you are selling, you are pulling your energy out of the property, you aren’t as invested in it anymore, you want to sell it and move on to the next thing. This seller clearly wants a premium for their property, but it’s not updated… so they ‘updated’ one part of it. But they didn’t do a really good job. Of course they did the work for as little money as humanly possible, because now they are spending even more money on a property that they haven’t been able to sell.

giphy

Here is the renovated bathroom. I think they were going for clean and modern, and in the pictures it looks decent, but in person it looks… pretty different. Definitely not as good as the photos, and it’s so obvious to me that they weren’t invested in the project at all. They used a cheap low grade brown/tan tile, put floor tiles on the walls, and topped it all off with vanities from Ikea. It was so different in person than in the photos I was literally speechless when I walked in… and not in a good way. You definitely don’t want potential buyers to walk into a newly renovated space and sigh in… disappointment.

new bathroom.jpg

Not all ‘improvements’ add value.

The reality is that people who are looking at places needing updating want to just do the updates themselves. People who aren’t wanting to renovate are not going to be interested in this space. The reason this particular property isn’t selling isn’t the fact that the bathrooms were outdated, it’s the fact that it’s overpriced.

This property was originally listed at $465K and is now down to $425K, but it’s been on the market for a total of seven months now. In the current market that’s a long time. Estimate that the mortgage is around $2,200/month and the seller has now put potentially another $5-7K into improvements that clearly didn’t wow anyone, as the property has been on the market for over 100 days since these were completed and still nothing.

That’s just under $18,000 in carrying costs from the mortgage and monthly association fees for seven months {$15,400 mortgage + $2,723 monthly assessment of $389}, plus another $5K in renovations {not even including taxes and other costs}. $425K – $24,000 that they’ve spent over the past seven months just waiting is already right around $400,000. I think this property is a good value at $400K. If they had listed at this price to begin with ~ seven months ago ~ they could potentially have at least $22,000 extra dollars in their pocket.

Who knows how much this property will end up selling for… I’ll keep you posted on what ends up happening with it, just because I happen to like it and think it’s such a great space and has amazing potential. But what happens if you are unrealistic about how much your property is worth?  If this property had been priced competitively in the beginning, it could have easily elicited multiple offers, and had people competing for it, driving up the sales price.

There are several mindsets that someone might be in as a seller.. They could ‘need’ to make a certain amount of money from the sale {the market doesn’t care how much money you need to make}. They could truly believe that their place is worth a certain amount because of it’s location or some other reason {the market doesn’t care what you personally believe}.

Ultimately it’s data from other recent sales and market activity that determine what price your property is likely worth. And as you can see by my {great} example today, ignoring that will only cost you money. There’s nothing wrong with selling a space that needs updating, there is a market for those properties, but no matter what you sell, make sure you price it right from the beginning.

 

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