Competition among sellers for mortgage-ready or cash buyers looks set to remain fierce in many markets in 2013. One option for sellers is to prepare their property for sale by spending a few thousand pounds, offering prospective buyers a ‘ready to move into, little to do’ experience. With many buyers having put their cash towards raising a deposit, they have little to spend on improvements when they move in.
However, Rightmove’s research has found that only 17% of sellers would be willing to spend on a ‘make-over’ even if they stood to gain financially by achieving a considerably higher price. Rightmove questioned sellers on what their reaction would be if they knew spending around £5,000 on a house make-over would mean gaining around £10,000 more on the sale price. Whereas 17% stated they would ‘definitely do it’, 18% stated that they would prefer to leave it for the buyer to make any alterations to the house after the sale. 2 in 5 (40%) respondents would do only some repairs, and 15% stated that although they would like to they could not raise the funds.
Rightmove director and housing market analyist Miles Shipside comments:
“As well as the ‘hassle factor’ of home-improvements, this also reflects many sellers’ lack of access to funds to carry out what would be financially astute improvements. It also highlights one of the legacies of the downturn with many sellers suffering from shrinking equity pots, limiting their ability to raise relatively small lump sums. Diminished or negative equity is a Catch-22 for sellers, as it potentially deters them from making the investment to increase the value and sale-ability of their property and maximise their gains or cut their losses. Agents report that properties that are closest to ‘showhome condition’ and ready to move into are selling more easily and achieving the highest prices, as buyers have little spare cash for improvements. Those sellers that can attempt a mini-makeover as a tactic in 2013 should consider putting some DIY products on their Christmas list.”