PAY NOW OR PAY A LOT MORE LATER
By Lee Davies
Deferred Maintenance on homes reminds me of the old Fram Oil Filter TV commercials where the mechanic says, “You can pay me now or you can pay me later”, as he holds up a $5 filter and then begins to replace an engine. Deferred home maintenance is no different.
Frequently we will list homes and walk the property with the seller to conduct our LDRE “Priority Punch List Report”. It is at this time that we, as a seller’s consultant, take off our “rose colored” glasses and speak the truth about what improvements should be made prior to introducing the home to the market. Every seller responds differently depending on their own opinions and their access to cash to make the repairs. But here is a list of items that we recommend you keep in exceptional condition so that, if and when, you go to sell your home, you are not caught by additional expenses relating to the sale:
1. Roof
2. Exterior Paint
3. Exterior Caulking
4. Landscaping
5. Gutters
6. Drainage
7. Bathroom Grout and Caulking
8. HVAC
9. Kitchen Grout
10. Clean – Really Clean
It is not uncommon for sellers to feel that they can negotiate these items once a sale is consummated and they can. However, the perceived lack of maintenance at the home will influence a buyer’s perception of value as well as the old theory “if we can see all of this deferred maintenance, then what is there that we cannot see”. Additionally, buyers, if they take the home “as is”, will expect a hefty discount to take on the work. If one negotiates the repairs as part of the home inspection, you are now going to be expected to hire a licensed bonded contractor to do the work with the buyer supervising the quality of the work by having a re-inspection. If the contractor does not do the work correctly, then there will be more stress and more expense involved in the process. It is not a fun process to have anyone tell you what to do and how to do it. That’s why we encourage our clients to do the work before anyone shows up to look at your home. When approaching the work pro-actively you, as the seller, can do the work or hire a handyman without big brother.
Often as we conduct our Priority Punch List Report on a home, sellers will want to know how much of a return they will get on their investment. While there is no clear cut answer, the fact is it is not so much about what the repair will “make you”, but rather how much the deferred maintenance will hurt you. Additionally, we will be looking at cosmetics like dated or personalized paint colors, carpet, hard surfaces, and decor; these too will add value and shorten the time on market (which translates to a higher selling price). Ultimately, some sellers are unable or unwilling to complete all of our recommendations and they pick and choose with our input on what items to address.
In the end, if home owners maintain their home along the way (Pay Now), they will not need $10,000 to $20,000 (Pay Later) to bring their home up to snuff at the last minute. The home will be ready to go in the instant that they find their next dream home. And the best part is that one can enjoy their meticulous property as they live in it rather than admire it on the day the “for sale” sign goes up.