The Impact is Preparing Your Home for Market

AFTER

In spring 2018 I had the privilege to meet and work with Bob, the successor trustee for 14 Drake Lane, the home he was raised in. The house had some deferred maintenance and was last used as a rental to help pay for his mother’s assisted living expenses. Bob lived out of town, so after reviewing my past work, he asked for my ideas and design advice to help transform his family home within a limited budget.

As part of my recommended process, we obtained inspections of the property up front. In our marketplace, buyers request inspection reports before they decide to write an offer so they can better understand the house, determine what to anticipate fixing and ultimately decide if the home is right for them. In Oakland and Berkeley, most properties are older and many homes have, on average, $35,000 in repair recommendations. As a seller, it is wise to make sure there are no big-ticket structural or system deficiencies before making cosmetic improvements.

After obtaining high-quality inspections on Drake, I created a plan for Bob’s review and approval. Every client is different, however, in this case, Bob deferred to me on colors and finishes as long as it worked within his budget. The goal for Drake was to keep the classic mid-century details and give it a fresh look without a big renovation. We wanted to provide the buyer with clean walls and floors to allow them to move right in and give them a canvas for their touches.

The kitchen floor was an old 1970’s vinyl, which we replaced with new solid oak floors matching the existing oak. This allowed the upstairs, kitchen, living and dining rooms to live as a cohesive space. The solid wood cabinets were coated with crisp white paint and new cabinet pulls to match the old copper hinges and cooktop exhaust hood. The worn tile counters and backsplash were replaced with porcelain penny round tiles, providing texture and are a nod to that mod era. The counters were a simple grey quartz known for durability and easy maintenance. The old cast iron sink was replaced with an oversized, deep stainless steel sink and gooseneck faucet providing room for large pots and sheet pans to be washed with ease.

The interior of the home was painted throughout including the brick accents. The original 1950s wood paneling was preserved as some mid-century purists covet this detail. The nailed-shut interior planter, a quintessential 1950s detail, was opened and new low-light tolerant succulents were added.

The downstairs level was given a facelift with new carpet and padding, and the 1970s wood paneling was painted white as well as the red brick fireplace surround.

All of the interior lights were replaced with new fixtures, which adds mood, style and is an important aspect of sale preparation. I look at light fixtures as equivalent to a belt or pair of shoes to an outfit.

The exterior of the house was painted with a bold trim color of black with a black garage door, and a white base color to give a salute to what homes were painted back in that day. Brass house address numbers (neither vintage or new) were replaced with Corten steel modern numbers to create warmth.

The landscaping had the additions of fresh lawn with new sprinklers and rows of ferns and Oakleaf hydrangeas. The barren brick planter was filled with fresh soil and mature succulents.

Details matter and buyers want homes that are clean, stylish and have good vibes.

BEFORE

AFTER

COST BREAKDOWN

Painting (interior/exterior) and window cleaning $16,000 Staging $6,800 (Staging can cost more or less; not all staging is equal and there are times that a more expensive staging may be recommended ) Landscaping $4,200
Plants $500
Carpet and installation $2,905
Hardwood floor refinishing and added new hardwood flooring in kitchen $7,115 Wall oven $1,573
Cabinet pulls $132
Kitchen faucet $392
Under-mount sink and tile for backsplash $418
Quartz for kitchen counters $1,047
Installation of tile backsplash, quartz counters, sink and faucet $3,450
Grout deep cleaning, new grout, and caulking in the bathroom $1,045 Handyman services (replacing some plugs/switches) $775
Hauling debris $500
Light fixtures and bulbs $1,570
House numbers and front door mat $235
Total $48,657

When looking at this example of costs, it is important to approach it as an investment into your property that will provide you with a greater return. It would be a fair statement to say that Bob saw a 3-4 times return on his investment. In some cases, this type of renovation can/may  generate interest from  buyers looking elsewhere.In this case, his property sold for 23% over the asking price and went pending with multiple offers after 14 days on the market.

BEFORE

AFTER

Signs of a slowing market

Here are the latest listing inventory stats (per Red Oak Realty):

• Active inventory is declining, but at an uneven and slow pace. We have been at a 6-year record high for the past 8 weeks.

• A wave of new listings hit the market last week, particularly in the $750K-$1M price range, keeping seller competition stiff.

• The number of pending properties has declined for the past two weeks, reflecting in lower buyer demand.

Additionally, average days on market for active inventory is at a 6-year year high: this week it is 37 days (it was at a record low the same time last year at 32 days). 

If these trends continue, sellers are going to have a harder time getting properties into contract and may need to take price reductions.

Buyers may want to consider getting aggressive on their offers for those not-so-perfect homes. There may be a "bargain" waiting to be discovered.

Data from the MLS for the following cities: Albany, Berkeley, El Cerrito, Kensington, Oakland and Piedmont. These charts are for Red Oak Realty and clients.

Selling in this market

I am noticing homebuyers are more selective and discriminating when viewing homes, considering price and deciding what to offer. They are analyzing the inspection reports closely, looking at functionality more than ever (i.e., is there off-street parking, what is the indoor/outdoor flow, how long will this property fit my needs), and looking to see if there is any potential to increase the value long term. All of my buyer clients this year have not felt "pressed" to buy, but are willing to throw in a great offer if the house checks all the right boxes.

What does this mean for sellers? A few things, it means now is not the time to overprice a home. The details matter and thoughtful touches that make a home stand out from its competition are important. Working with a local Realtor who understands this market and can make the calls to other agents and be the squeaky wheel on your behalf can make a huge difference in your outcome. This is not to say that we are suddenly in a buyers' market because, as of now, we are not. There are still many buyers who want in and are ready to plant roots; it means that a bit more care and analysis is needed to navigate this market. 

Below are recent questions/concerns from a potential seller:

1) Can we make minor fixes (floors, paint, light fixtures, staging) and stay living in our home while it is for sale?

Vacant and staged homes typically sell for more than owner-occupied houses for many reasons. Most stagers that do a great job will not stage owner-occupied homes. When we (in general) live in homes, we tend to generate smells, food, moisture from the shower, etc. One can absolutely live in a home while on the market however extra cleaning before leaving may be necessary. With owner-occupied properties, buyers are typically restricted from viewing the home certain hours as opposed to being able to view it anytime, so it would be ideal if there could be a broad opening of showing hours. Also, some Realtors are predicting a surge in inventory and if this is the case, buyers will have more choices, so it is important that your home shows its best within your ability. 

2) How much do you anticipate for the cost of minor fixes?

Many sellers spend between $15,000 - $25,000. Here is a breakdown on a recent deal:

Paint = $8,000, staging = $7,000, current inspections = $1,000, new light fixtures = $1,000, yard clean up and improvements = $2,000, window cleaning = $400, deep grout cleaning = $900

3) I have some concerns about inventory and that we need to sell ASAP. 

I have worked in all type of markets and will work my hardest no matter what the scenario. My best advice for having the most success with the sale of your home is this; go on the market showing your best. The details matter and buyers need to not only like the space, but imagine themselves in the home. Use a local Realtor who really knows our marketplace who knows how to help you prepare the home for today's buyers who tend to be younger (i.e., paint colors, staging, light fixtures - really matter!). I would start as soon as you can as not all inspectors, painters and stagers are available immediately.

Favorite Things: No. 3

A few of my favorite things... Next week I'll visit the Decorator Showcase house to get new ideas and inspiration for my listings. Get your tickets at decoratorshowcase.org soon! Hope your May is great.

Penthouse Lifestyle, Neighborhood Vibe

Impressive penthouse-living without the dues. This single family home has a marvelous floor plan that is open and generous – entertain on the main floor, retreat to the bedrooms on the second floor. The natural light is abundant and your eyes will dance to the shadows the sun casts throughout. Newer modern west-facing deck with full sun and prized views. The grandiose upstairs has a dreamy master suite with a walk-in closet and a custom window that flaunts the awe-inspiring Bay, San Francisco, Downtown Oakland and Bay Bridge views.

When I took this listing in April of 2017, this well-loved home was in need of updating. The kitchen was worn and all original from 1974, the floors downstairs were original entry tile and old carpet, the master bathroom had seen better days, and the deck was deteriorated and not safe, just to name a few immediate tasks. This home meant the world to the Wang Family so they wanted to present this property in it's best light.

The first task as their Realtor was to determine the property's condition. Before any of my clients invest in cosmetic updates, I always advise them to get current inspections from highly regarded professionals. I would hate for clients to invest money into their homes when there could be significant structural or system repairs needed that could devalue the property.

After inspections are performed, I review the findings with my clients and determine what repairs will yield the best return on their investment. Once my list is prepared, I help my clients obtain bids for said repairs/improvements and work with my clients to create an action plan.

In this case, I envisioned taking this 1970s home and making it sexy, yet comfortable. One of the biggest assets of this home is the panoramic views of Oakland, the Bay, San Francisco and the Golden Gate and Bay Bridges. The deck was in hazardous condition, so engineer Monte Stott was hired by my clients to design the rebuild. After calling six contractors to rebuild the deck, my clients were able to secure a contractor to remove one pier-and-post deck off the living room and remove one cantilevered deck off the master bedroom. The deck off the living room was upgraded with a stainless steel cable with Redwood railing, and the upstairs deck was removed altogether and replaced with a custom 110-inch picture window. The old carpets that had seen decades of life were removed and solid Red Oak floors were installed downstairs.  With the exception of the original tile entry and the tile in the powder room, the entire downstairs was transformed to natural finish floors giving the large space a cohesive feeling.

A few likely original 1970s brass track lights remain in the house, but the majority of the interior light fixtures were replaced with groovy West Elm fixtures. Some of the dying juniper shrubs were removed and a few drought-tolerant plants were added to the front yard, such as variegated Phormium. The inside and outside of the property were painted with Benjamin Moore paint, with the exception of Kelly Moore paint on the interior ceilings. 5 1/2-inch solid wood baseboard with no edge detail was added to add a pop to the clean design. The original 1970s geometric railings and the old Harvest Gold double oven give a nod to the decade it was built.