How to Maximize your Profit when selling your home by Making Repairs or Remodeling.

Your home's condition affects the marketability and, ultimately, the sales price of your home. If you are considering making home repairs or remodeling in preparation to sell your Tucson home there are a few things you need to consider. 

The Importance of the Appraisal

Typically, when a Tucson home is sold the Buyer will borrow money to make the purchase. Since the loan is secured by collateral (the house), the lender must make a valuation of the property to be held as collateral. The lender will hire an appraiser to estimate market value. Since most homes are purchased with a loan, the appraisal process is a driving factor for price trends in our marketplace. Even when Buyers pay cash, they typically obtain a valuation either from an appraiser or from the real estate professional who is representing them. Because of this, I use the appraisal process as a guide to advising my clients regarding which improvements will generate the desired return on investment when selling their home.

Importance of the Neighborhood

The first step is to consider the neighborhood and marketability of the homes there.  Ultimately, your home in Tucson will be compared to those that are similar in size, proximity, age, and condition.  Appraisers use a six-tier categorization system to rate the condition of a home.  When you make modifications in the form of repairs, updating, or remodeling, you are effectively changing the condition of your home and, hopefully, moving your home up to a higher condition tier where it will be compared to homes of higher quality that sell for more money. When the appraiser compares your home to those higher priced homes, your home's market value increases and buyers can and will pay more for it.

 Balancing the Cost of Repairs Against the Potential Increase in Sales Price

When considering which modifications to do prior to a home sale, you and your Tucson real estate agent will be evaluating how much you would spend to move your home up to a higher tier and how the increase in sales price you could obtain compares to the amount spent.  There is no universal formula that can be applied across the board because the condition of the home at the outset must be considered in relation to the final result. Homes that start in poor condition are likely to generate a higher return on investment than those who are in a higher tier already.  Also, the quality of the finishes used will affect the cost of the project and the outcome. You need to consider what finishes buyers expect to see in homes at your desired price point.

Importance of Consultation with a Local Expert

If you are making improvements in anticipation of a sale, I recommend consulting with a Tucson real estate agent to understand what is happening in your local Tucson market and where your money will be best spent. Each market is different, and projects that lead to substantially higher sales prices in one market may not have the same effect in another location. Therefore, it is extremely important to speak to an expert who understands the local Tucson, AZ market and can give you good advice. This will help you spend your money efficiently and maximize the profit you can achieve from your home sale. I provide these consultations free as a courtesy to Tucson homeowners and would be happy to meet with you. Get started by sending me a Message!