Upgrades to Avoid – What Will Turn OFF Buyers in Sacramento!

I meet all kinds of people in my travels. Some are just born homeowners with home improvement vision and skills that you just can’t teach. They are builders at heart and whatever they touch is golden. From creating outdoor kitchens and living spaces to replacing outdated windows and doors, they have that knack. We envy them and when you meet them and see their houses you just step back and say wow. With all of the work, they are perpetually ready to sell their house.

For the rest of the homeowning universe, it falls somewhere short of that and the thought of selling their house is a major ordeal not to mention a major expense. It’s a game of catch up to fix items that broke over the years from either normal wear and tear or deferred maintenance. For these homeowners selling a house means home inspections, contractors, real estate agents, time and lots and lots of money.

If you are part of the latter group then this article is for you… because financially speaking, fixing and updating a house are two different things and sometimes you can get it very wrong.

It takes a special skill to understand the design of houses and the way that they were built 30 years ago, let alone 100 years ago. The structures, the materials and the different ways to repair, renovate, update and transform without making a mess of the whole thing. From cast iron plumbing, copper pipe, pex, electrical panels and the like it takes years to know what you are looking at and know what works.

It is expensive and yet if you have walked through hundreds and maybe thousands of houses you begin to understand the way that people want to live. Most people want open spaces with less parts of the houses they buy defined by walls. Others like houses that are well defined with every space having a purpose… If you are thinking about making a few repairs and upgrades before you list it, know that some changes can be lucrative and pay off in the long run. However, not all upgrades are created equal. In this article we’ll let you know which upgrades to avoid!

Normally, updating and beautifying your home is a sure-fire way to get more potential buyers in the door. However, many sellers make the mistake of making too many upgrades or upgrading things that do not increase the property value. Some people even make upgrades that end up blowing the budget and the sale before they even get started by adding a swimming pool or a pond that just creates more work in a buyers mind that otherwise liked the house.

Before you rent a backhoe, tear up the outside decking or even take a sledgehammer to the bathroom wall or two, consider making only the necessary repairs and only the upgrades that will pay for themselves by substantially increasing your home’s value. Scratch making a trip to Home Depot to buy all new fixtures and appliances, that are going to sit in a room while they wait to be installed.

Home Improvements and Upgrades to Avoid

Don’t Add a Pool or Spa Unless YOU are Swimming In It

I know that it is obvious and most people are going to say… who would do this. Surprise, surprise… in today’s world people get crazy ideas. Even the fix and flip shows recommend against putting in a pool. You will not be able to add the price you pay for a pool onto the previous value of the home. It doesn’t work that way. I have seen people spend over $50k to add a new pool, only to be able to add a couple thousand to their asking price. Unless you plan on swimming in the pool yourself for years to come, a pool will end up costing you more than it adds value. A pool doesn’t grow equity even if every other house in the neighborhood has one. Skip the pool and save your money!

Rethink the Color Schemes & Get Your Personal Stuff Out

Avoid personalizing your house with a mood for every room. Believe it or not bright oranges, reds, yellows and purples from ant fad are not back in style nor are all of the other colors of the paint store color wheel. This can include wild designs for backsplashes in kitchens, baths and anything else that you consider one of a kind. To most buyers, changing those things looks like work that they are going to have to do. Most buyers want move in ready. That means that they don’t want to repaint, redo tile or replace backsplashes.

Consider toning down bold colored rooms in advance. Create a calm environment with colors that are a bit more neutral. Forget white, unless its on a ceiling, its cold and sterile. A can of neutral paint cost a lot less than a total room makeover. And on that note… Don’t Choose new light fixtures for Your Buyers. There is nothing worse than walking into a house and you can tell the light fixtures have updated with evidence of the old rings still there… if you insist paint the entire ceiling prior to installing the fixtures… which leads us to…

Don’t Make Upgrades Unless You Know What You are Doing.

If you are hell bent on spending money, call a home inspector and have the house inspected from top to bottom. Find out what is wrongg in advance. It should be no secret to you that in today’s market the buyers want move in ready. If there are obvious repairs needed, make them because 98% of all buyers will order at least one inspection. For the rest of the world that doesn’t want to do anything to sell the house… In the case of repairs, providing a credit to the buyer, so they can have things done the way they want may not work. First the Lender may not agree and demand that they be fixed in advance of closing…

Think I am exaggerating? Yesterday, I got a call from a real estate agent wanting to know if I could repair stucco on a house built in 1952 with exterior cracks in the stucco and interior cracks in the drywall/plaster. that was in escrow. The lender, Wells Fargo Mortgage, would not approve the loan unless the items that were found in the appraisal (not even an inspection) were fixed in advance. Then the real estate agent informed me that the owner had no money to pay for the repairs and asked if I minded being paid through escrow…. really? What if the sale fell apart? What if Wells Fargo declined the loan for other reasons? It was silent on he other end of the phone.

While offering a credit to buyers can be a great incentive when buyers are looking for upgrades, it does not generally sidestep the need for repairs that inspectors or lenders require. On the other hand buyers might be attracted to the idea of choosing their own countertops and lighting fixtures. Don’t make upgrades based on your own personal enjoyment or taste if you are looking to get the most amount of money for your house while at the same time spending as little as possible to get the job done.

Don’t Remodel the Basement

Do you have a house with an unfinished basement? If, so… leave it that way. The costs to finish the basement isn’t worth the return on investment. In fact some basements are not livable spaces and a lot of people try to convert them and never take into account moisture control and the realities of spaces underground. In some houses basements are the small space for water heaters and HVAC systems. I also dont recommend converting the space to a wine cellar unless you plan on using it during the sales process…

Here is the thing. Renovations are time consuming and costly in terms of both time and money. Building permits, architect fees, contractors and then the actual work. Those things need to be managed. My big tip… If you haven’t renovated it while you lived there, there is no reason to do it now that you are trying to sell. An unfinished basement is best left that way as should other spaces in your house….

Keep Each Space Intentional

Keep the rooms as they were intended. Extra bedroom? Keep it a bedroom, not a garage. Already have a converted Garage, then change it back to a garage… Let the prospective buyers decide how they want to use the space. A room conversion will not increase the value of your house. A 4-bedroom, 2-bathroom home will get more traction than a 3-bedroom, 2-bathroom + den at the same price. Also, a gym/office/library/breakfast nook can become confusing. Plan your space with purpose or have an empty room when it’s time to show to buyers.

What is the Competition Doing?

Take a look at other homes in your neighborhood and keep your upgrades somewhere in the middle. If you go too far with yours, you will be risk losing money in a neighborhood that can’t support the price hike. Remember 98% of buyers need financing and whatever needs financing needs a lender and when there is a lender you need the house to appraise at the sales price. Keep your property competitive within your neighborhood, and don’t over improve! You can still push the top of the price spectrum for your neighborhood, but be realistic. Fix what needs to be fixed to pass inspections and then sell.

Want to skip it all? Sometimes the best way to solve a problem house is to just sell it. Forget the sign in the front yard and the parade of people rummaging through your house. Sell if today for cash and skip all of the repairs. My name is Peter Westbrook and I am a real estate investor in Sacramento and we buy houses in Sacramento, Stockton and Modesto. We’ll make you an all cash offer no inspections, and no contingencies. Fair market value minus the cost of repairs and some holding cost. No Fees and No Commissions.