More than half of homebuyers today make improvements to the property they close on. "Move-in ready" doesn't seem as important as it used to be. Only 18 percent of recent homebuyers reported buying a home that had recently been remodeled. If this seems like an unusual trend, it just one of the surprising findings in a study of real estate buying selling habits found in a recent study.
More than 80 percent of sellers, according to the same body of statistics take the time and spend the money to complete home improvements prior to listing. Although those improvements are most commonly relatively minor, including interior and/or exterior painting, redoing a bathroom, boosting curb appeal, improving landscaping and adding new flooring, typical sellers choose to complete at least three projects in an effort to sell property quickly and for top dollar.
Buyers, on the other hand, typically move in to a new home with the expectation that some changes will be required. "More than half of all homeowners purchased a property that needed updates" according to the study. First-time buyers comprise nearly half of the total market, and the home search, across all buyer demographics, spans a little over four months. But "perfect" is not the deciding factor.
Characteristics of the new Dream Home
What are all those buyers searching for?
New construction is considered by approximately half of all buyers; options to choose finishes and decor packages are attractive for 41 percent of lookers, and 37 percent view community amenities as a bonus in new developments. Energy-efficiency and potential cost savings are important to almost half of buyers.
But today's buyers seem to believe that home improvements -- over time -- go hand in hand with home ownership. Whether prompted by budgetary limitations when they first purchase, uncertainly about specific wants and needs, or simply an ongoing desire to personalize their space, the average homeowner (defined as a residency of at least one year) has made 6.7 improvements to their home. Most commonly completed updates include interior painting, exterior landscaping, replacing appliances, and changing the flooring.
Major improvements like kitchen and bath remodeling, interior modifications and additions are typically not begun immediately upon move-in, although Millennials, significantly, report more basement finish-outs than other age groups.
Millennials also show more interest than other groups in upgrades and lifestyle improvements that coincide with their world view and enhance personal expression, notably sustainable and energy-efficient renovations. The majority of owners who make improvements do so primarily to express personal style.
Putting in Extra Effort
Approximately two of every five potential buyers considers the possibility of a distressed property, including a short sale, foreclosure or auction offering. Although much of this interest seems driven by financial factors, there is a high percentage of buyers who relish the opportunity to "get their hands dirty" with renovation projects.
Sixty-two percent of homeowners "say they prefer to tackle home-related projects themselves versus work with contractors," and younger owners are typically more receptive to DIY projects. Concurrent with that tendency, however, is a trend toward buyer expectations that a seller will accede to repair or update requests contained in a contract to purchase. So it's a mixed bag when it comes to the "move-in" ready home. The dilemma of do or not do seems to extend equally to sellers and buyers.
In major markets across the country, there is little disadvantage to listing a home that needs minor updates. Buyers tend to expect it; in fact, younger buyers seem to prefer a less than perfect home, relishing an opportunity for sweat equity.
The lesson for sellers? Don't sweat the small stuff if you don't need to. Ask your real estate agent which projects are best done before listing, and which fixes should be left for negotiations.