Pricing in the Cost of Repairs when Selling your Home
This episode of It’s a Seb Show deals with pricing in the cost of repairs when selling your home. Let’s say you’ve got a home to sell, and you figure that if you did the work, your home would be worth $500,000. For the sake of simplicity, let’s say the only work the home needs is a paint job, and the paint job is going to cost $10,000. If you decide to skip the paint job, the question is, how much should you then list the home for? Naturally, if it only needs $10K worth of work, it’s reasonable to list your $500K home for $490K – right? WRONG! The reason for that is the same reason you’re thinking about skipping the repairs. It’s the hassle. And the money out of pocket. And probably a hundred other things. The buyer is looking at it just the same way. You need to consider not just your COST for the work, but the VALUE the buyer will put on having the work done, or not done. The difference between your cost and the price you’ll get for the work is what’s called entrepreneurial profit. In my market – the greater San Francisco Bay Area, in January 2021 – an average amount of entrepreneurial profit is 2.5x – so if there’s a $10K paint job that you don’t do, the buyer will be looking for a $25K discount…which is why it’s so smart to DO THE WORK before you sell your home, because you’ll net a LOT more money. And that’s why I as a Realtor offer Concierge Services, to help you get that work done.