Episode 14: Choose When to Fix-Up. Or, Choose to Sell As-Is.

Scott Williams: Sweet Home Santa Barbara where the skies are so blue. Sweet Home Santa Barbara, what’s worked for me can work for you.

Jonathan: Welcome back listeners to Sweet Home Santa Barbara. I’m your co-host, Jonathan Robinson and with my friend and realtor Scott Williams. Well, welcome back Scott. Important topic today, how did you decide really went to sell your house for maximum price or selling as is? And there’s a lot of specific things to consider when trying to make that decision. What are some of the distinctions you’ve made and things that could be helpful?

Scott Williams: Well, I think overall it’s the context that you’re selling in the context really means the market conditions the more you have a seller’s market, a hot market where the seller has most leverage the more fixing up your house makes more profit for the seller.

And then we have the opposite side of that we have a buyers’ market. A buyers’ market is as it says there, the leverage is now on the buyer side. Usually, in a buyers’ market, you’re experiencing the prices of houses starting to stagnate or decline and so then it’s much harder to fix up a house in that type of condition and make a good profit.

Jonathan: Right. Is it always obvious which market it is or is it sometimes a little blurry?

Scott: Well, they passed through. Usually, when it’s a real hot market or it’s a real cold market, that is a buyer’s advantage. That’s usually pretty well publicized but in a lot of times it’s a little more normal market, a little more balance between the two and when it’s more balanced if you’re going to fix up your house you want to stick to the things that are really the most profitable and not get too deep into it.

Jonathan: Yeah, and we’ve talked about that in other episodes. How about the condition of the house? Does that make a difference?

Scott: Well, sure. You’ve got once everything gets to be 20 years old in your house then you have to start thinking about replacing it or fixing it. If you’ve got that kind of stuff again, you better pick your battles better decide which ones you want to do and that’s we’re consulting with each other that’s what I do with the sellers to kind of figure out their situation. How much time they have because all of these things take time.

Jonathan: Yeah, I would imagine another factor is what the seller wants in terms of what they can handle on terms of stress and psychology and where they’re at in life.

Scott: Yes, absolutely. There’s plenty of people where the whole idea of just thinking about selling, moving creates a very stressful reaction in them and then actually getting down to do it even more stressful. So, we have to really have a heart-to-heart discussion about how much of this can they take.

Jonathan: Yeah, I’m a psychotherapist and I seeing a lot of clients of couples going through selling their house and remodeling and that can be pretty tough on them. How much money might people normally make if they make the good decisions in terms of deciding to fix up the house a little bit, what kind of return on investment is there?

Scott: Well, I’m going to use a Santa Barbara example recently. Now this is a tract house in Goleta we figured that the house was worth about 900,000 dollars as I met with that seller and that seller happened to live in Germany and they were not going to be able to help fix up the house, but they really liked the idea and they like the fact that I could organize it for them. So, we spent about two and a half months, get about eighty thousand dollars with a work to that house. Now, the market was hot and going up during that time, but we made really good choices and the house sold for a million three-hundred thousand dollars. So that’s a profit of three-hundred and ten thousand dollars on those eighty thousand dollars of expenditure. That’s a very high return and is a good example of how good it can be when the market is really hot.

Jonathan: Absolutely, how long might a person take to fix up their house? What kind of time frame are you talking about?

Scott: Well, it’s we hope to keep it under three months, and we like to be under two months, but it varies on how much work we do. In this one, we didn’t change out the bathrooms or the kitchens soon as you do a whole room replacement you have to stretch on towards the three-month period of time but otherwise, we try to keep it to two.

Jonathan: You have any other stories that helped illustrate some of the situations that you’ve been talking about.

Scott: Yes, Jonathan. In the case of a hot market, you don’t have to do the fix up and I want you to go and use a good example of a home where they did not fix up the house because it comes out sort of fixing up your house is the better choice but not always. We had a home recently on Santa Cruz Boulevard this is in Santa Barbara block or so away from the ocean. So, it had a good location going for it and the owner decided to not fix up that house and it needed everything. Kitchens, baths, paint jobs, the roof was leaking it just was an endless list of work that need to be done and yet when we first started talking the house was worth about a million two fifty and it was about a month and a half later, we actually put it on the market, and we had multiple offers and it sold for over a million five. So, if you can take a house that’s not in good condition and still sell it for a very good price.

So, it really comes down to the stress. How much time you have and whether or not you want to make a go with making a profit. We were usually able to provide that, but you don’t have to decide just to fix up your house. If there are other choices.

Jonathan: I’m sure part of your 40 years in the business you can advise people as to what is probably the best in their current market conditions, their current situation, psychology, et cetera and I assume that you often consult with people that way.

Scott: Yeah, this is where I’m crossing over into your territory because the stress of what they can put up with and what they’re able to handle, is really important in having the whole thing be successful. It’s not just making the money; they have to be able to deal with it and try to make the money. I help with that.

Jonathan: What’s the best way people could contact you talk about their situation?

Scott: Well, emails are really good choice. Scott@ScottWillilams.com.

Jonathan: Great. Well, thank you any last comment on making that choice or anything else that we may have missed?

Scott: Both choices are fine. We just need to figure out what they want to do.

Jonathan: Great information as always, Scott. Thanks, and thank you listeners and keep listening for more episodes of Sweet Home Santa Barbara.

Scott Williams: Thank you for listening, please subscribe to our podcast on your favorite app. If you know, someone preparing to sell their home, please tell them about the podcast. Visit ScottWilliams.com to contact me and download the two free E-booklets. “Is My House Saleable Now?” and “How Not To Buy A Money Pit?” Thank you for listening.