By Barbara Lehrer
Real Talk
Barbara Lehrer
Contrary to popular belief, a home does not sell for less if it has some repairs that need to be done. Buyers have a tendency to scramble for prices on small repairs after an inspection, when the reality is that the seller is not willing to negotiate on a list of repairs.
A marketing price is based on location, square footage and topography, together with current closed property statistics. These four influences assist the bank appraiser and the realtors in determining if a price is solid.
Let’s discuss the definition of repairs. These are broken items. If these items were fixed, would the home be worth more money? The answer is no, and I will explain why.
Broken appliances, toilets or sliders, broken decks or cracked windows, kitchen cabinet problems. This type of punch list from an inspector is typical, and the purchaser can use this inspection as his resource to work with after he is the new owner.
When I list a house, there are multiple small items that we on the selling side can disclose on the proper addendums. It is then up to the buyer and their agent representative to realize the value is in the property itself. Realtors should have counseling sessions with their agents in order to help them understand that the repairs need to be major, dangerous or structural to warrant a reduction in the price of the home.
In these marketing times, getting the deal should be first on the list, as there is always also a backup offer or two. The bank appraiser has the final say on the price, and they do not look at the inspection nor walk through the property looking for repairs. If a roof was ripped or the heat not working, then the bank would definitely take note. But otherwise they are only looking for the four contributors to the marketing price listed above, and as professionals they use recorded data on similar properties.
Purchasing a home means having some extra money in your pocket to tweak that home in your own time after you own it. It is not a time for sellers to make it better for you or pay for your repairs. Homes are averaging 40 to 60 years old on the market; that sets the stage for an abundance of small items to be upgraded each year you own.
If you need more information on these issues, email Barbara.Lehrer@cbmoves.com.
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