Real estate professionals get asked on a regular basis by sellers about what improvements sellers should make to their homes to get them in tip-top shape and ready for the market. While things like cleaning the house, improving curb appeal and getting rid of clutter are obvious answers, that is not what this article is about today. Today, we need to address the liability that you may be opening yourself up to by making claims about improvements that will increase the sale price – when in fact they may not.
A great example of this was when a senior citizen asked her real estate agent what was needed to get her house ready for sale. The real estate agent involved in the transaction said that he felt it was critical that she replace all the carpets in the house. He informed her that by doing so, she would absolutely get her house sold quickly. So the senior citizen – who, by the way, was on a senior pension – took her entire savings of almost $5000.00 and she re-carpeted the home.
However, even with the new carpet, the home sat on the market and did not sell.
The woman’s son got in touch with the managing broker and said he was filing a lawsuit against the agent and the brokerage because his mother had taken her last dime to do what the agent had recommended based on his professional opinion. Now his mother left with no savings and no sale.
So what should the agent have done in this situation? Should he have recommended new carpets? In this particular example, the agent had not done enough research to realize that the price the seller wanted for her property for was above the current market value.
Whether you put in new carpets, new appliances, new paint, new whatever – if the property you are improving is priced above the market, it is not going to sell. Before you recommend any improvements that will take cash out of your seller’s pocket, you need to be extremely clear about what that might or might not do for the seller. You must also look at supply and demand in the market.
I have worked in markets where the market was so robust that homes in any almost any condition were selling. I have also worked in markets where homes that were pristine weren’t moving. So before you recommend that your seller do something they might regret, make sure you have done your homework and your research.
New carpets don’t sell houses: the market conditions are what determines the price of anything on the market.