Saturday, May 17, 2014

Selling: Return on Investment

Return on investment.  Those are the keywords that I take away from the video below from Keller Williams Realty's Youtube channel.  ROI is spoken of in terms of staging in the video, but it is one of the concepts that I often find myself discussing with sellers when we meet to discuss the value of their home.

Everyone wants to sell their home for the maximum possible price, that is no secret.  However, one thing I find that sellers often lose track of is how much they have to spend in order to get their maximum value.  Without going through elementary examples, the advice is to be certain that putting money into a home is going to get money out of a home.  If you spend $3000 on improvements, make sure that there is no doubt you are going to get more than $3000 out of the sale. 

That sounds extremely simple, but many sellers only see the scenario where $3000 will get them $10,000+ out of the sale.  It might, but if you have to lower your list price, or fix something that is uncovered as a result of the renovations, the dangers of losing money on those improvements become more and more into play.  

Bottom line:  carefully consider all outcomes, not just the outcome that fetches the highest selling price. If you are going to put money into a home prior to the sale, it needs to be treated as an investment, and should provide significant financial gain.

Take care,
Scott Morrison

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