To Redo, or Not to Redo? This Time, Yes

By Dave Fratello | February 9th, 2021

Getting ready to sell?

You're going to face all kinds of questions about how best to prepare the home for market.

Most typically, if we're consulting on a home sale, we're going to look at ways to lightly refresh the home with paint and some degree of staging.

But there are other cases where a little further remodeling, pre-market, can make sense. One must weigh the benefits of putting money out of pocket in hopes that the return is there.

For a lot of people, a $2-for-$1 ratio would be the guide. If you can spend $25K to get $50K more on the sale, for instance, you should probably do the work.

In the recent case of a small East Manhattan cottage at 1651 23rd (3br/2ba, 1200 sqft.), first the sellers decided not to remodel for market, then they did. (Not our clients.)

You see here the modernized kitchen from the recently closed sale ($1.500M), contrasted with the kitchen pre-remodel.

The sale was successful only on the third listing of the property since Aug. 2019, and only after the updates.

Three times was the charm because they did work after the first 2 failed listings.

You can infer right away why the sellers figured a remodel to be unnecessary. The kitchen was upgraded within the last 20 years or so, functional, "good enough." And before you go in spending money on new cabinets, countertops, sink and more, you stop and say, "how do we know the buyer is going to like our choices?"

Much the same goes for the living room, where the original flooring and fireplace were just fine.

The fireplace was painted brick. The flooring was typical hardwood.

But look at the flourish from a little work there, too.

Marble on the fireplace updates it. New wide-plank flooring gives the home a more modern feel.

Worth noting about the paint and staging, too: The new (sold) version of this listing uses a little earthy color on the walls, instead of white, white, white everywhere, which is the simpler route to take in presenting a home to the market. There is clearly more character to the staging presentation of the room, as well.

With the work, outcomes were different.

The home actually first sold in July 2018 for $1.390M.

About a year later, without doing any work, the owner sought $200K more ($1.590M).

Even after dropping to $1.450M, they couldn't find a buyer.

A new agent took over in late 2019, eventually dropping the price to $1.425M (what would have been a net loss for the owner). After a spell, that price attracted a buyer, a deal was made... but broken by COVID. They canceled soon after the March 2020 lockdown.

It seems that the sellers then realized that they couldn't count on buyers to pay what they wanted without some improvements. The master bath was already fairly up to date, so it was the kitchen and flooring (and fireplace) that would be the focus.

In the end, a home that wouldn't sell, lost a deal and was looking like a net loser for the sellers eventually sold for quite a bit more: $1.500M.

Now, we don't have the owners' spreadsheets here, so it's hard to say whether they profited nicely, or just limited their losses. Time was actually on their side, as local home prices rose noticeably while they were doing the work on the house.

At least now they know it's all done. And the buyers got a better home for the price.

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NOTE: Dave's company, Edge Real Estate Agency, offers no-cost loans to our seller clients for light (non-structural) remodeling to help prepare a home for sale, in addition to project management services. If you're thinking of selling and might benefit from this service, please email Dave  (address: dave [ at ] edge-rea.com).

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