How Critical Will It Be to Renovate Before Selling In 2024?

When a homeowner gets ready to sell, one of the biggest considerations is understanding what price they might reasonably attract for what's likely their largest investment. Depending on how well the home has been maintained or whether it's been upgraded, they might learn that they could capture significantly more profit with a few renovations.

The most recent National Association of REALTORS® Profile of Home Buyers and Sellers showcases how important a move-in-ready home can be in certain markets. Here's a closer look at what it showed.

Buyers Want to Avoid Problems

The homebuying population is already challenged by elevated home prices, high mortgage interest rates, and low inventory. They are making compromises in a lot of different areas, and one place where they might not be as willing to compromise is the quality and livability of the home they purchase.

According to NAR's profile, buyers who purchased a new-construction home did so primarily because they wanted to avoid renovations and potential future systemic problems with the house. Of the buyers who purchased new homes, 45% said they were seeking to avoid future home repairs.

More Sellers Are Renovating Before Selling

In response to this buyer demand, the majority of sellers (60%) are conducting either major or minor repairs on their home before listing it. Almost half of all sellers (48%) did minor renovations before they listed their home, and 12% did major renovations before listing.

Why? There are a few reasons. First, because buyers are prioritizing move-in-ready homes, these homes get more attention from qualified buyers and sell faster. Some of the time that sellers spend accommodating those renovations is time that can be regained from the sales process.

Second, sellers see potential to make a good return on their investment of renovating the house. According to Revive, the average seller who opts for a presale renovation will make $186,000 more when they sell the house; the average return on investment for presale renovations is more than 200%, per Revive.

How Agents Can Support Sellers With Presale Renovations

Companies like Revive help to connect sellers with contractors who will help them make the renovations to their home and will collect payment after the home is successfully sold. If your brokerage doesn't currently have an agreement with such a service provider, then there are ways to work with contractors in your area.

Make a list of the people who are doing home repair and renovation work in your area and ask them what kind of experience they have with presale renovation and if they've ever considered turning that into a core part of their business. Alternatively, look up details and information about home equity loans or lines of credit, which could be an option for your sellers to help finance any upgrades before they sell the house.

Agents can help showcase their value to sellers by offering a wider range of options; in fact, providing presale renovation solutions might even unlock some inventory in your area from homeowners who don't currently have the cash to renovate. By meeting your listing prospects where they are, you can become a go-to specialist for solving this specific real estate problem for clients.

Related reading

• The Dos and Don'ts of Presale Home Renovation
• How Are Buyers and Sellers Finding Agents in 2023?
• Unlocking Inventory: Why Retirees Could Be a Good Resource for Listing Leads