A dated property is not positioned for a retail price. The problem is that the homeowner looks at sale prices of properties that are conditioned and staged to sell and calculates the cost to update their property. When a property is in the $400,000 range and needs $20,000 of updates and conditioning; the Seller thinks the offset for the work should be deducted from the $400,000. The Seller’s perspective is a price, without conditioning, of $380,000.
The problem is that most Buyers do not have an additional $20,000 beyond their down payment and closing costs. Therefore, you are eliminating a broad segment of the Buyer pool. The properties that need attention are not positioned for a retail price. In general, properties that are not current or conditioned to sell are 5% – 10%, below retail, after deducting the update cost. The same $400,000 property would have a deduction of $20,000 for the work needed and an additional deduction of $20,000 for it not being conditioned compared to retail homes. The home would most likely sell in the $360,000 range without the updates. Not doing the $20,000 in updates could cost the seller substantial in the final sale.
While the Seller only thinks of the repair and update cost, the Buyer is taking a risk with doing the updates; unknowns, inconvenience, and expects a reward for their vision and future work. Today’s Buyers are seeking and willing to pay substantially for a move-in ready home with today’s look, colors and features.