For luxury homebuyers, the desire to purchase a home requiring renovations is becoming a thing of the past. Today’s affluent real estate shoppers are looking for turnkey, move-in ready properties with all of the amenities and none of the extra work.
And it looks like that’s not changing any time soon. According to a forecast from Persistence Market Research, the move-in ready luxury home market is expected to hit $920 billion by the end of 2025. That’s up from $550 billion just two years ago.
As an agent serving these ever-evolving high-end clients, it begs the question: should your affluent sellers remodel before listing their properties? Would it make their homes more marketable? More valuable? More appealing?
Here are the pros and cons The Institute for Luxury Home Marketing recommends you consider before advising sellers to implement renovations.
Advantages of renovating before listing:
- It typically enables a faster sales time.
- It makes for better listing photos.
- It can improve the marketability of a property.
- It allows you to maximize your asking price — and justify it.
- It gives your sellers more leverage in negotiations.
If your clients are looking to move fast (particularly relocation clients who are on tight timelines), this can be a big deal, but generally, there are very few people who truly want to sit and wait for their home to sell!
On top of this, pre-listing renovations can also increase the value of the property and justify a higher asking price. Throw in that today’s buyers simply prefer more move-in ready homes, and now you’ve got a property that doesn’t just command higher offers, but more buyer interest, too. It also means faster profits and faster commissions, so it’s a win-win all around.
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Disadvantages of renovating before listing:
- It could delay the listing and marketing of the property.
- The renovations may be a nuisance to the homeowner.
- It might require significant up-front cash.
- The renovations might pose a safety hazard.
- It may be difficult to choose the right projects, contractors, and vendors.
On the downside, renovations can be time-consuming and tedious. Though renovations might speed up a sale once they’re complete, it takes time to get there. If there are several contractors to hire, endless materials needed and multiple projects on the agenda, the renovations could actually delay the marketing of the property and, eventually, its sale and transfer, too.
Finally, renovating can be a hassle. If the homeowner is still living on the property, they might tire of the noise, foot traffic, and other nuisances that come with a remodel. The renovations could disrupt sleep, interrupt work schedules, or even pose a safety hazard for those living in the home. For these reasons, many sellers may shy away from this added work.
To Remodel or Not to Remodel
Should your client remodel before listing their home? There’s no hard-and-fast answer, but it could make the property more marketable and the sale more lucrative (for both of you.) Still, renovations aren’t without their drawbacks. Make sure your client is well aware of the nuisances that come with home remodeling and prepare them for the time and expense it may take to complete the renovations properly.
You should also caution your sellers that not all remodeling projects are created equal. Help them choose their renovations wisely by using resources like Remodeling magazine’s Cost vs. Value Report and Zillow’s top home features, as well as your own knowledge of luxury real estate trends and best practices. Make sure they select projects that improve not only the aesthetics and marketability of the home but also the property’s value given the current market.
The most important tip we can offer is to help your sellers find the right vendors to handle their chosen renovations. Connect them with the contractors, architects, and designers who can execute their projects efficiently, successfully, and with the highest quality and attention to detail. By taking this pressure off their shoulders and making the process simpler you will actually generate a long-lasting relationship that will be rewarded by long-term benefits such as referrals and additional business.
Learn More About the Luxury Real Estate Market
Being move-in ready isn’t the only thing that sells a luxury property. Do you want more insights into today’s luxury market or what affluent buyers and sellers are looking for? The Institute for Luxury Home Marketing can help. Consider our Certified Luxury Home Marketing Specialist certification or enroll in an online or in-person course.
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Source: Luxury Insights