Many people that decide to sell make mistakes in "prepping" their home for sale. These mistakes can be either spending money to spruce up the home that will not return in increased offers or a better price, and or not doing things that will definitely increase offers or home value.
There are many scenarios but broadly they fit into the notion of a neighborhood price ceiling. Neighbor hoods do have a ceiling. It is very possible to over improve your home. It is also possible to leave money on the table by not bringing your home up to the neighborhood standard.
If you are intended to sell your house as a "fixer" you have to decide whether or not you want it financeable. There are essentially three tiers of finance in this regard. The best is government financeable. These homes meet the more strict standards of the FHA and VA lenders. Having your home qualify in this tier means the entire market is available to purchase the home. This is a cosmetic fixer at worst and is move in ready. Next is conventionally financeable. This means the home meets the Fannie Mae and Freddie Mac standard. The home can have a few issues like a roof that is nearing the end of life, or a bad deck in back but still is livable. These loans typically require a larger down payment by the borrower or more expensive mortgage insurance if less than 20% is put down. It tends to eliminate most first time buyers or those with tight finances. The final tier is cash or alternative financing. In this tier you are more likely to get offers from flippers or investors at lowball amounts. You might get an ambitious person that wants to live in the home but you won't be anywhere near top dollar.
If you find yourself in the cash only tier it is typically a waste of time to do cosmetic fixing since the home needs much more serious attention anyway. If you are in the Conventional tier it can be worth some cosmetic work to attract non investor buyers who tend to bid up higher. It is generally better to be in an inferior home in a nice neighborhood than the superior home in an undesirable neighborhood.
If most home in your neighborhood are in average to below average condition and few of them have modern updates, it's better not to over improve. Cleaning up and doing some fresh paint and or making minor cosmetic repairs is fine. Don't do a 50k kitchen remodel however as you likely will not see that money at closing. If your neighbors home are all noticeably nicer than yours, then you can definitely make a handsome gain doing upgrades that bring your home into alignment with the neighborhood.
Before doing any expensive renovations talk to your trusted real estate pro to be sure the market will be attracted to the changes and whether the expected price will benefit from those improvements.
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