Selling your home during a recession can be a trying experience, but not impossible. Even during a recession, people still have changes in their lives which mandates moving, and moving (for most) involves purchasing a new home. Here are some techniques, tips and considerations when placing your home for sale during a recessionary period.
Myth: Pretty homes sell faster than homes in need of updates and repair
The truth is, investors are more eager to purchase homes in need of repair; otherwise known as value-add homes. Further, investors tend to be more proactive in building a portfolio during a recessionary period than during a bullish market. During a recession, cost of goods goes up, interest rates also tend to increase, while salaries remain stagnant; as a result, home prices compensate for the poor economy by lowering – setting the perfect climate to invest in homes.
Myth: Ready-made homes sell before fixer-uppers, even to the general home Buyer.
Home Buyers must be more savvy during a recessionary period, especially as interest rates rise. Many home Buyers, even those that already own a house with a mortgage, quickly realize that they may not qualify for a mortgage loan as easily as before; as a result, they must lower expectations. Hence, smaller and/or fixer upper homes become more highly sought.
During a recession, home prices do lower. But that doesn’t mean you cannot demand a premium price for your home. To compensate for lower home prices, here are a few things you can do to raise your property value and expand your Buyers market to attract both homestead buyers and investors.
Start Packing Now
Pack personal and hobby items, clothes, kitchen items that normally sit on the countertops – the same with bathroom items, clean-out those junk drawer(s), reduce items on book shelves, and remove furniture until a room feels open and larger. In short, feng shui and stage your entire house. The listed items detract from your homes natural beauty by redirecting the attention to the items. Feng shui and staging is a technique used by professional real estate showing agents to enhance the beauty of your home, make it more inviting, and spark the imagination of the Buyer.
Give the House a Fresh Coat of Paint
Paint is one of the easiest, and lesser expensive ways to give the house a facelift. Use neutral colors like: agreeable or repose gray or navaho white, with a complimentary shade of white on trim and doors.
Tip: Go to https://www.sherwin-williams.com/en-us/color/color-family/white-paint-colors/SW6126-navajo-white and search for recommended color combinations like this.
Before you paint, here are a few helpful tips that will provide professional results:
a) Use a primer like Zinger or Kilz to coverup stains, marks, or dark paint. Otherwise the marks will bleed through the paint and cause a Buyer to be concerned about damage, such as water, mold, or nicotine stains.
b) Remove nails and screws in the walls. Use painters’ putty, or for small holes you can use toothpaste, to fill the voids. Holes in walls tend to stand-out after being painted. Filling holes before painting will give your house that fresh – new look.
Exterior Home Appearance and Landscaping
Exterior home appearance is equally or more important than the inside, since it provides a first impression. First impressions can set the mood of the Buyer, regardless of what the interior looks like. So, spruce up the exterior with these low-cost ideas:
a) Trim trees and bushes
Speaking of bushes, no bushes along the front of the house leaves the house empty looking. They don’t need to be layered and sculpted, but do have some bushes across the front of the house – even if sparsely planted. A well-defined garden bed with a few bushes will greatly enhance curb appeal.
b) Keep the lawn cut and manicured
c) Rake and dispose of loose items like twigs and leaves
d) Put fresh bark in the garden bed
Tip: most cities have free wood chips available to the public. The city has to clear trees, chip the branches, and store them. These make great bedding in gardens.
e) Plant some flowers to give the garden some fragrance and color
f) Paint the front door. Painting your front door an accent color directs attention to the entrance, and away from other possibly unsightly features. Depending upon the color of your home, recommended colors that are popular include: medium-to-dark blue, black, or maroon.
g) Repair the fence, and clean the fence line. Besides being a code violation, broken fences attract a lot of negative attention. Wild trees and other plants growing along the fence line, not only damages the fence, but creates a negative curb appeal.
h) Lastly, clean exterior walls and windows. Renting a power washer for 1-day, and cleaning the exterior, whether it is brick or siding, will brighten-up your home.
Tip: add TSP (trisodium phosphate) to your water while pressure spraying. Available at your local hardware or home improvement store, TSP helps remove dirt and stains from surfaces, whether on brick, vinyl or other painted siding.
COST: Do-it-Yourself vs Contract Labor
So maybe you are not a do-it-yourselfer. Here are some rates to help you work with contractors.
1) Packing – most of the cost can be limited to boxes-tape-markers, as cleaning drawers and boxing items is something most anyone can do. But moving services also include boxing up items, storage, and ultimately moving to your final destination.
Think about having a garage or moving sale. Make sure to get the proper permits from the city, as most require a permit to regulate garage sales. Selling items is a win-win in support of your home selling and moving: 1) you make some cash, 2) reduce items that you have to pack, move, and unpack, and 3) you probably needed to downsize the clutter anyway. It also makes your Feng Shui and Staging a lot easier to manage.
Did you know that a Staged house sells 80% faster and brings a 20% higher offer.
2) Painting can get expensive, as I’ve seen quotes for the same paint job range from $2500 to $12,000. The typical cost of painting is $2.50-to-$3.50 per square foot, depending upon how much trim and ceiling height (cathedral ceilings require scaffolding, which are normally rented by the painter). For a 1500 square foot home, expect to pay $3,750-$5,250 for a quality paint job.
Maybe you are a DIY,
Here’s the good news, a Zillow survey found that painting your front door black brought on average $6,500 more for the home. Painting the remainder of the house can bring 10% more than a house that is not freshly painted. For example, a $250,000 can bring up to $25,000 more with a freshly painted home and the right color.
Tip: Don’t paint each room a different color. It makes it difficult to nearly impossible for the new owners to decorate. Use the same color throughout the entire house. You don’t want prospective Buyers worrying about paint color as they walk the house.
3) Getting some sun early morning or late afternoon is not only healthy, but is the perfect time to work in the yard. Getting a little dirty not your thing? Most commercial landscaping maintenance will cost $80 per week for the average yard, with trimming bushes and cleaning leaves in garden beds extra.
Yard maintenance cost cutting idea: pay a local neighborhood child to maintain your yard, or find an ambitious high schooler. They typically charge half what the commercial landscaping companies charge, and even will trim the bushes and clean the garden beds as part of the job.
A well landscaped yard can bring 15% to 30% increase return on your home.
BONUS: More Home Enhancing Ideas on a Budget
Want a few more home enhancing ideas on a budget. Here are some quick ideas:
1) Replace light switches, outlets, and faceplates. Switches are 88 cents each, and faceplates 74 cents; for $1.62 per switch, you can replace those worn, sticky, dirty eye sores with brand new.
2) Replace recessed lighting rings. Older recessed lighting is preferably replaced with LED lights. But by simply replacing older-dingy recessed light rings, provides the appearance of new lighting in the house. Also make sure that none of your light bulbs are burned out, AND use the same light temperature throughout the house. Common light temperatures include: 5000k (bright, daylight) to 2700k (warmer, softer). Also recommended is using the same wattage bulbs. Using 100W equivalent, regardless of the temperature, will showcase your house and the new paint.
3) We haven't mentioned flooring, as new flooring can be expensive.
a) If you have carpet, and they are not worn out, have them steam cleaned.
b) For laminate or wood flooring, clean and coat with Mop & Glo. This product especially makes an old floor look new again.
c) Tile grout can be a problem. Steam cleaning is the easiest way to clean grout. But steam cleaning can pull up brittle, lose, or broken grout. Re-grouting is an inexpensive way to make that tile floor appear new. Recommendation is to steam clean the grout, then place new grout over the top of old grout. For floors, typically use a sanded grout, while wall tile uses un-sanded grout. Sealing or enhancing grout is typically recommended. But some grouts include polymers that are self-sealing. Read the label, or ask your professional, if sealing is required.
Miscellaneous Home Improvement Ideas
d) Change your HVAC filter. Before showing your house to a potential Buyer, change the HVAC filter, especially if the intake filter is visible on the ceiling or wall.
e) Caulking and resealing around tubs, showers, and countertops is a quick and easy way to refresh your wet areas.
f) Clean your kitchen vent hood, replace the grease trap filter.
Now What: How to Get Started
This is a lot to take-in, but you don’t have to perform all of these home improvements. Take a look at your house, pick 2-3 ideas and implement. Then re-access again to determine if you would benefit from 1-2 more. Ultimately it will depend upon your budget, timeline, and patience. Either way, you cannot lose from implementing any of these recommendations, as you will receive a greater return for your investment at the closing table. Recession proof your home, and your home sale will go smoothly - knowing you have maximized the return on your biggest investment despite the recession.