All Things Real Estate: Upgrades may boost sales price but not profit

All Things Real Estate: Upgrades may boost sales price but not profit

On April 30, I had an appointment with a seller to provide them a CMA (comparative market analysis) or what some call today a value analysis to determine at what price he should list his home. When I was on the phone with him the night before about the number of bedrooms and baths and what improvements he had done in the last three to five years, he began to explain to me what he was planning to fix and upgrade prior to placing his home on the market. I listened carefully and then I said to him, “Wait until I come over tomorrow and we’ll discuss all of your plans and considerations.” When I arrived, we greeted each other and he showed me around his well-landscaped and flowering property with a pool in the rear.

We then proceeded to enter his home so that he could show me the fixes and upgrades he had in mind. He had all these ideas about upgrading and I let him know that he would definitely sell much quicker if he carried them out. However, the money invested in those upgrades wouldn’t necessarily provide him with a higher price, make any money above his costs or even reimburse him for what he had spent!

I did tell him some basic things he could do, such as pull up his carpeting, lightly sand the floors as needed and then add two coats of polyurethane to bring out a brilliant shine that purchasers would appreciate and be beneficial as an improvement. Even repainting the interior wasn’t necessary as the walls and ceilings looked fine. The next buyer may not like the choice of color and the next purchaser just might repaint the home anyway, so why spend the money unless your home hasn’t been painted in at least 10 years and shows it.

By the time I finished discussing his potential improvements and repairs, he realized how much money I saved him and his home would sell without all those things he had thought would get him a higher price.

Next we went into the basement and the first thing I saw was a full bathroom. I asked if he had a CO (certificate of occupancy) and he told me the bathroom was there when the home was constructed. To be sure, I said, go to the Building Department and ask for your folder under F.O.I.L. (Freedom of Information Law) and check to see if there was a CO or a COC (certificate of completion) document from the original build.

After that I pointed out that with a finished (not an unfinished) basement you needed to provide egress out of the basement with a separate door leading out (not the normal staircase leading upstairs) or a pop-out window leading to a gravel or cement constructed pit with a ladder leading up to ground level. This rule (check your local ordinances) was enacted to safeguard people who might be in the basement during a fire and enable them to exit the area safely.  In the event of an illegal basement rental, be quite sure that you protect your inhabitants to make it much easier for them to escape and survive.

Unfortunately, he was not aware of this law and my feeling is that the county has not educated the public sufficiently to make homeowners cognizant of this most important requirement.

We proceeded to go back outside and he was showing me the fences on the property and his wife pointed out that their property was 10 feet beyond the fence and that their neighbor was aware of it. I told him to get a letter from their neighbor attesting to that fact. Otherwise adverse possession could come into play if their neighbor has had that piece of property on their side for at least 10 years and could claim the property. As it happened,  the neighbor did have it for over 35 years when the fence was installed incorrectly on their property line by the fencing contractor.

For your information adverse possession can vary widely between states. For example, it’s  five years in California and 30 years in Louisiana.

The fence on the other side of the property was also suspect, too. I urged the owners again to go down to their local or county Building Department (or hire an expediter) to search out and handle whatever paperwork was required to make sure everything was legal. No one wants surprises when the buyer’s attorney orders a title search and then your headaches and stress begin with the possibility of having your sale die prior to the closing.

The buyer will not be approved for the mortgage unless those illegal conditions are remedied and paperwork filed with the Building Department. A word to the wise should be sufficient. So, homeowners, make sure all your improvements, extensions and whatever you thought didn’t need a permit will have one with a CO before you put your home on the market.

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Philip A. Raices is the owner/Broker of Turn Key Real Estate at 3 Grace Ave Suite 180 in Great Neck. He has 40 years of experience in the Real Estate industry and has earned designations as a Graduate of the Realtor Institute (G.R.I.) and also as a Certified International Property Specialist (C.I.P.S). For a “FREE” 15 minute consultation, a value analysis of your home, or to answer any of your questions or concerns he can be reached by cell: (516) 647-4289 or by email: [email protected] Just email or snail mail (regular mail) him with your ideas or suggestions on future columns with your name, email and cell number and he will call or email you back.


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