Smart Moves: How to sell a run-down home

Why are some sellers with a property in poor condition unwilling to do the cosmetic work necessary to maximize their profits?
By Ellen James Martin Published: July 5, 2014
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A couple in their 40s — a truck driver married to a convenience store manager — were in the throes of a nasty breakup when they rang Sid Davis to say they wanted to liquidate their property promptly.

Davis, an experienced real estate broker, knew from their address that the couple lived in a strong starter-home community with coveted one-level houses. Thus he assumed their robin’s egg-blue property, with 1,450 square feet of living space and a popular floor plan, would be an easy sell.

But what Davis found upon visiting the home was disappointing. Through the turmoil of their unhappy marriage, the couple had let their property deteriorate badly.

“The carpets were shot, the paint was old and peeling and the vinyl floor in the kitchen was totally worn out. Besides, the house was jam-packed with clutter,” he said.

Davis, the author of “A Survival Guide for Home Sellers,” failed to convince the couple to restore the good looks of the house with fresh paint, new carpet and a replacement kitchen floor. The only thing they agreed to do was to clean and clear clutter.

“Because of their resistance, we had to chop 15 percent off what the house would have sold for in good condition. Also, the sellers had to give the buyers, a couple in their 20s looking for a bargain, an $8,000 allowance for carpet, paint and flooring,” Davis said.

Why are some sellers with a property in poor condition unwilling to do the cosmetic work necessary to maximize their profits?

Homes are allowed to deteriorate for many reasons. Elderly sellers and those confronting serious health issues are understandably more focused on their ailments than on keeping up their property. Also, cash-strapped owners of all ages who have to sell for financial reasons often lack the available funds to make a property show-worthy.

Ashley Richardson, a real estate agent affiliated with the Council of Residential Specialists (www.crs.com), said people facing foreclosure sometimes become so disheartened that they can’t muster the will to improve their home.

“When their finances fall apart, some people just give up hope and their coping skills decline. They default on an emotional level,” Richardson said.

In some cases, she contends that spending a significant sum to prep a house in poor condition for sale is a bad idea, especially for people who must make a quick exit.

“You should limit your spending to high-visibility projects that give you the best return on investment. These include minor upgrades to your front entrance, kitchen and bathrooms,” Richardson said.

Here are a few more pointers for sellers:

• Seek out a seasoned agent for unvarnished advice.

Are you stressed out by the prospect of overseeing all the work that must be done to get your home ready for sale? If so, you’d be wise to seek a listing agent willing to serve as a project manager, said Eric Tyson, a personal finance expert and co-author of “House Selling for Dummies.”