Tales From The Trenches Part 1
I recently took a listing in San Anselmo. The home was an older 1950's rancher with modifications made over multiple decades.
The basement area had been converted to a den and they had excavated and added office space with a separate entrance. Thank goodness they got permits along the way for the work they did. While we can work with homes that have had work done without permits, headaches are fewer when permits are in place. (More on this later....)*
"So how did it go?"
The Seller contacted me and indicated that it was time to evaluate what upgrades should be done prior to going on market. I did a walk thru and made suggestions. My number one suggestion was to update the kitchen cabinets and upgrade the formica to granite with a subway tile back splash. Ikea has some nice kitchen cabinets and can actually come out and install. They design as well. (Another client in Sleepy Hollow had great success with her Ikea installation.) Since this home was going to sell for over a million dollars, I knew that even a $15,000 investment was going to yield at least $30,000 of net profit, if not more given the San Anselmo dirth of inventory.
There were also three baths. The master had been upgraded in the recent past. Another bath was 1950's circa with the colored tile that has become "retro" cool. (I did not recommend changing that out) The lower level bath was not prominent enough to merit an update. I didn't believe that an investment in the upgrade of that bath would generate any significant improvement in price.
We also discussed paint, floors, and the current tenant in place.
"Well, did it sell?"
As we were formulating our plans, we informed the Tenant of our plans. Lo and behold, the tenant wrote a strong pre-emptive offer PRIOR to the Seller making any improvements. The Seller was spared both the cash outlay and sweat equity. However, the Seller had not replaced the roof in almost 20 years and did give a modest credit for its replacement. I negotiated all facets of the contract and both parties were very happy; The Tenant did not need to move and the Seller did not need to spend weeks prepping the home for market.
Take Aways:
*Always pull permits for upgrades, including new kitchen tile, windows, furnaces and hot water heaters.
But, don't worry! If you have non-permitted upgrades or work, we will disclose it in writing to the Buyer up front and arrangements can be made either with a seller credit or back permit fees that the Seller can take care of prior to close of escrow.
More on this in my next Newsletter, Tales From the Trenches Pt. 2.
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