The Mortgage Professor: SHOULD YOU FIX UP A HOME BEFORE SELLING IT? RISMEDIA, - Article: Jack Guttentag is professor emeritus of finance at the Wharton School of the University of Pennsylvania. Recently I put my home up for sale, and because it needed a new roof, deck, and septic system, came face to face with this question. This article is based heavily on that experience, in which I made a serious mistake that other sellers can avoid. It is easier to sell a house that is attractive to potential buyers, which means that you spend a little time and money on cosmetics. This is partly just a matter of making sure the house is clean, the yard is neat, the driveway is swept, bushes pruned and so on. Easily fixed structural defects, like a loose shingle, should be fixed. Houses almost always look better when furnished than when empty — and they also look larger. If you are moving to another residence and plan to take your furnishings with you, try to arrange to show the house before you move out of it. But if your house also has structural defects that are costly to fix, as mine did, the challenge is in deciding whether or not to fix them before sale. Every house has defects, some obvious and others hidden. Both types will affect the price a buyer is willing to pay. It is a mistake to think that a potential buyer will assume that the only defects that exist are those that are visible. Serious buyers will most likely invest in an inspection by a company that specializes in such services. The firm retained by my buyer produced a document of 22 pages of small print, plus many photographs. Buyers that don’t retain an inspector will probably assume the worst about the unseen condition of the house. There aren’t many buyers who will pay a price based on the assumption that everything they can’t see must be OK. Pricing the house on that assumption is a good way to keep it on the market unsold indefinitely. While you continue to pay for utilities, taxes and insurance,...
Posted on: Wed, 04 Sep 2013 15:19:45 +0000
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