Turnkey = Less Commissions
Turnkey homes, renovated by the seller before listing, offer a convenient option in the real estate market. Sellers have various options for financing these renovations: using personal funds, hiring a concierge service, or engaging a remodeling contractor. Each of these choices, while providing different levels of control and convenience, comes with its unique considerations.
Renovation and real estate concierge services connect homeowners with service providers, simplifying the complex process of home improvement. This convenience is particularly valuable in today’s fast-paced market, where making timely updates is crucial for attracting buyers. However, these services often require sellers to list with specific realtors, usually at a standard commission of 6% or higher.
When using personal funds for renovations, budgeting is key. Suppose you have a budget of $15,000. This amount might suffice for DIY projects, but professional contracting work could quickly exceed this limit. Investing in areas like paint and flooring often yields the most significant impact, transforming the space into a more appealing and modern home. However, this improvement can inadvertently highlight outdated elements such as appliances, windows, counters, and cabinets.
To address these issues without extensive replacements, consider hiring professional move-in/out cleaning services. They specialize in deep cleaning and can revitalize existing fixtures, often making them appear almost new. It’s important to note that regular house cleaners may not provide the same level of thoroughness as these specialized professionals.
If you opt for a contractor-led remodel, be mindful that recouping the full investment through the sale might be challenging. However, a well-executed renovation can significantly reduce the time your home spends on the market and make it more appealing to a larger pool of buyers.
For inspiration, visiting model homes can be incredibly beneficial. These homes are often designed by professional decorators who are adept at incorporating current trends. After your tour, explore the neighborhood for newly built homes. Sometimes, new homeowners opt for minimal upgrades from builders and later customize their homes with their own contractors. These post-purchase renovations can lead to the disposal of nearly new, often high-quality materials. Keeping an eye out for such opportunities can be a goldmine for finding upscale items at a fraction of the cost. Regularly visiting local donation centers like ReUse or Habitat for Humanity can also yield excellent finds like new flooring, window treatments, or light fixtures, often available at significantly reduced prices.
The Take:
Realtors and buyers alike favor turnkey homes for their readiness and appeal. As a seller, showcasing your home’s turnkey status can be a powerful negotiation tool, especially when discussing commission rates. When realtors propose a 6% commission, counteroffer with 4%, emphasizing the ease of selling a turnkey home.
It’s essential to consider the impact of current interest rates on the real estate market. Lower interest rates increase buyers’ purchasing power, making them more inclined towards turnkey homes. In contrast, higher rates can deter buyers from undertaking post-purchase renovations due to the additional financial burden.
In a personal anecdote, I recently facilitated the sale of a home where the sellers, though not professional remodelers, significantly enhanced their property through diligent research and hard work. Their revamped entry door, a product of patience and careful planning, became an impressive highlight of the home. This example underscores the potential of thoughtful renovations in elevating a property’s appeal and value.
This expanded version of the article retains the original structure and information while providing more depth on each topic, offering a broader perspective on the benefits and considerations of turnkey homes.
Key points include:
1. Renovation Services: These services simplify the home improvement process but often require listing with specific realtors at higher commission rates.
2. Budgeting for Renovations: Using personal funds necessitates careful budgeting, emphasizing that cost-effective updates like paint and flooring can significantly enhance a home’s appeal.
3. Highlighting Outdated Features: Renovations can inadvertently make dated elements in a home more noticeable. Professional cleaning services can rejuvenate these features without the need for complete replacement.
4. Contractor-Led Remodels: While they may not always offer a full return on investment, professional remodels can make a home sell faster and appeal to a broader buyer base.
5. Seeking Inspiration and Materials: Visiting model homes and looking out for high-quality, discarded materials from nearby new homes can provide inspiration and cost-effective resources for renovations.
6. Negotiating Commissions: The article suggests leveraging the appeal of a turnkey home to negotiate lower realtor commissions.
7. Impact of Interest Rates: Low interest rates tend to increase buyers’ preference for turnkey homes, while high rates make post-purchase renovations less appealing.
8. Personal Experience: The author shares a personal experience of selling a renovated home, highlighting the importance of detailed planning and the significant impact even small renovations can have.