I am often asked by sellers who are bringing their properties to market, “should I renovate or sell ‘as is?'” It is a valid consideration and one that is worthy of a case-by-case assessment when the property begs the question “to renovate or not to renovate?” The answer is always… “it depends.”
In real estate, location, price and condition are the three main determining factors for value. You only really have control over price and condition, Maui checks the box on location, you are a third of the way to a home run. But seriously, a unit with a view is going to command a definite advantage!
A compelling price position may be the quick answer to compensate for less than perfect condition. Certainly if the unit is in original or dated condition, the price might reflect as a buyers’ opportunity next to a unit that’s been tastefully renovated.
Addressing the more complex issue on condition, allow me to put forward some thoughts,
Certainly a good opportunity for renovation work is when you are making repairs and upgrades can be incorporated at the same time.
However, bringing a property to market points to personal reasons for selling and if time is a factor, a renovation is certainly cause for delay to that timeline. With the exception of buying at a bargain and investing in improving the property to bring it back to market at market value, the question here is for those who hold a property and are weighing the costs of a remodel to increase upon the value in todays’ market.
Renovation work equals Time and Preparation. There is a lot to take in to consideration such as market direction, permit applications, interviewing, availability and scheduling of reputable contractors…. motivation to sell based on a more immediate timeframe may negate the undertaking of a remodel.
There are two sides to the coin when it comes to a renovation. The saying “beauty is in the eye of the beholder” should serve as a “seller-beware” reminder as we often get emotionally attached when we are involved in remodels. After all, it is a reflection of one’s taste and becomes a personal investment of time and energy. A buyer may rather see a blank canvas and not appreciate the efforts of an expensive remodel when their intention is to allow their own creative flair its expression. It is therefore something to carefully consider as a seller.
Some sellers will naturally take the cost of the remodel and understandably add that amount to the list price. Conversely the buyer may look at the property and think “we aren’t paying for the sellers remodel” and deduct the calculation in their offer amount. It is the proverbial two-way street. It is with cautionary advice then that sellers be mindful of over personalizing a remodel if the intent is to sell. There is the consideration of time, cost and equally time lost in undertaking a renovation. Whilst Buyers may buy and pay for your efforts equally so a buyer may look for an opportunity to embrace their own renovation…..in which case your remodel may be for nought.
Without discounting the shining results of renovations, there are probing questions as a seller to explore with your Realtor to arrive at the best decision for your situation with the ultimate intention being to sell your property.
In my experience, contractors share that those happiest with a renovation tend to be the new owners. It is in that marking of territory, putting ones stamp on things, that we witness this innate human nature, with even recent remodels being reinvented.
Many complexes, such as Wailea Point for example, have a renovation calendar to allow for construction work to happen in summer months before the busier high season months of winter. As such, you will find contractors working flat out from April 1 to October 31 on renovation projects. It is crucial to make the necessary inquiries with the Homeowners Association to understand when you may undertake a remodel, if there are restrictions on when and what association approvals call for. You may find that what you hope to achieve with a remodel may not be allowed by the association or advance permits may be required. Best to ask first rather than seek forgiveness later!
To renovate or not is therefore a more personal proposition that is a discussion to be had with your Realtor, contractor, homeowners association, and, if applicable, community association, which, like Wailea Community Association (WCA), requires review by the design committee for approval for any improvements to ensure aesthetic conformity.
We remain in a market in Maui that has limited inventory and we are seeing buyers looking for both move-in ready and “project” purchases. At the end of the day, “you only need one buyer” as the saying goes, so this is where your chosen Realtor goes to work, promoting the assets of your property, to reach the ideal buyer. Sometimes a home run equation is location + price, versus location + condition. I am making a sweeping “home run” call on location, where anywhere Maui qualifies as location box ticked! If you have questions, lets talk. There is a vast landscape to explore when it comes to opening the pandoras box on renovations!
Katy Foxwell, REALTOR / Broker, GRI, e-PRO®
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