What are Pre-sale Renovations?

Pre-Sale Renovations
For Equity-Rich Sellers Who Need a Home Renovation

One of my investors has a rental that was severely weathered by the tenants. It has left him with quite a dilemma on what to do next. 

He has a lot of equity in the property and hates the idea of selling below market value in a thriving real estate market. Renovated properties are often receiving more than one offer and over the asking price.

However, holding the property for months while he and a hired contractor renovates the home is a costly decision. These holding costs -- not to mention the trips to Home Depot, lot rent, and upfront expenses -- soon add up. Even worse is the fact that the best time to sell a home is spring, but, with his small crew, this renovation project could easily drag into the summer. 

There is another option!

The Value of Pre-Sale Renovation Services

This is just one scenario where pre-sale renovation offered as a value-add from agents could pay dividends. Several brokerages like Keller Williams, Compass, Redfin and others are now offering a service to sellers where they come in and analyze the property. 

Brokerages can also suggest renovation projects. These projects might include flooring, paint, appliance replacement, cabinets, bath remodels, and staging that will help sell homes faster. Think of these modifications as small face lifts. The goal is to make the property shine.

The best part of a pre-sale renovation service is that all upfront costs for renovation are deferred until after the sale. Several brokerages offering this service hire licensed and general contractors that operate in each county. 

The company brings in designers, carpenters, and specialists to review each project to see if the renovation can return dividends. Depending on the renovations, work can be done in as little as 15 days. This shortened time frame can make all the difference during key buying seasons like spring and summer.  

Not the Answer For Every House

That’s not to say that pre-sale renovation is the solution for every house.  Those that require major renovation may not be an ideal candidate. And, it would certainly prove difficult if the homeowner is living on the property. The renovation service works best for vacant homes.

It’s fair to say that most remodeling costs do not recoup the full cost of the project, according to National Association of Realtors Remodeling Report. For example, a full kitchen remodel may cost an average of $68,000, and a seller can expect to recoup about 59% of the cost in a resale. 

In this case, sellers would be better off reducing the home price to compensate for the dated features.

More Options For Sellers

For those sellers experiencing an expired listing or low traffic, it may not be about good marketing as much as price and condition. Until now, sellers had to fund upfront all the renovations and hope to recoup at time of sale. 

Now, with pre-sale renovation, your brokerage partner will help you renovate, manage the project, source the contractors, and fund the project until the close of escrow. For more information about pre-sale renovations and how we can assist you wish your project, contact us at 951-970-4771 or visit JonesRealtySoCal.com

Click here to download a Report to learn which renovations return the most.