Home Mortgage Alliance Corporation (HMAC)

How to make your ‘pink elephant’ home enticing to potential buyers

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Published Date 4/4/2024

Those laminate countertops with the fake wood grain. Lime green tile dating back to the 1950s. The shower in the downstairs bathroom was never fixed, so you’ve been using it for storage. Truth be told, you wanted to renovate parts of your house, but never got around to it and now it’s time to sell.

Other homes of comparable size and age in your neighborhood have been remodeled over the years, but yours is what some would lovingly call “vintage” but wouldn’t want to live there. What are your options when it comes to listing your home? After all, everything sells for a price.

According to Realtor.com’s Terri Williams, cash-strapped sellers without the funds to renovate before listing may choose to offer an allowance, or discount, on their home to entice buyers. “In this situation, the seller would agree to take the financial hit on repairing anything that the buyer sees as an issue,” says Williams. “The allowance would be written into the buyer’s offer, and the buyer would have to check with the lender for details that pertain to this type of clause, as some lenders may have a problem with it.” A home improvement allowance is certainly a viable option.

This is an especially good strategy if you’re having trouble selling your house or when a buyer brings up the need for updates. When the same issues are mentioned repeatedly, it’s time to pay attention. “The allowance amount very much depends on the kind of updates that need to be conducted,” says one agent Williams consulted. “The allowance may be determined based on the total price of the necessary updates.”

How do you know how much allowance to allow? The first step is to get written estimates from contractors to do the work. Then offer an allowance for the estimated amount. As for how to relay this to buyers and their agents, present it as an opportunity: you preferred not to update the kitchen and baths because you felt the eventual buyer would want to choose their own colors and finishes.

This can be taken with great excitement or it can fall flat, depending on whether a potential buyer has the time, patience, and stomach to remodel parts of your home after purchasing it. Buyers with a “vision” will now have the ability to choose updates and colors to their personal taste and liking, and by managing the project themselves, they will have peace of mind knowing that the repairs will be done to their liking.

Buyers looking to find a move-in ready home, however, avoid fixers like the plague — envisioning themselves taking time off from work, chasing down contractors, and (if they plan to occupy the property during the renovation), a life of zippered plastic walls, tradesmen with boom boxes, and drywall dust that chokes them at every turn.

If, however, your home is in a highly desirable location or neighborhood, depending on the market it’s possible that a home improvement allowance won’t even be necessary to entice buyers. A Brooklyn-based agent told Williams: “In desirable neighborhoods with limited inventory, a home will likely sell, even if it’s outdated or saddled with condition issues.”

Williams then asks the question: Aside from offering a home improvement allowance, how can you attract buyers if you don’t have money to fix up your property? “The best solution is to price it correctly. That includes taking into account the conditions in that individual market and how much work the buyer will have to put into the home,” she says.

Your last option is to roll up your own sleeves. While there would never be enough instructional YouTube videos to aid you in doing extensive repairs on your own, it’s possible to put some level of sweat equity into it. It costs nothing to do a thorough cleaning and remove clutter, and adding paint to the interior is a small investment if you’re willing to don some old clothes. You’ll get the biggest return on investment by painting your home’s interior with a fresh coat of white, which reflects light and makes the rooms appear larger. Plus, it gives the appearance of a clean palette and can help potential buyers imagine themselves—and their stuff—in there.

Realtor,TBWS

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